Working Paper: NBER ID: w22921
Authors: W. Walker Hanlon
Abstract: While the Industrial Revolution brought economic growth, there is a long debate in economics over the costs of the pollution externalities that accompanied early industrialization. To help settle this debate, this paper introduces a new theoretically-grounded strategy for estimating the impact of industrial pollution on local economic development and applies this approach to data from British cities for 1851-1911. I show that local industrial coal use substantially reduced long-run city employment growth over this period. Moreover, a counterfactual analysis suggests that plausible improvements in coal use efficiency would have led to substantially higher urbanization rates in Britain by 1911.
Keywords: Industrial Revolution; Coal Pollution; Economic Development; Urbanization
JEL Codes: N13; N53; Q52; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local industrial coal use (L71) | long-run city employment growth (R23) |
| coal use efficiency (L94) | urbanization rates (R11) |
| pollution (Q53) | location's attractiveness (R32) |
| pollution (Q53) | worker and firm productivity (J29) |
| increased coal use (L94) | reduced long-run employment growth (J69) |