Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333743 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12197
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
What are the long-run effects of sustained exposure to air pollution? A unique natural experiment allows us to examine this question. In 1982, a sudden cut in Soviet oil forced Socialist East Germany to switch to highly polluting lignite coal. While the shock sharply increased air pollution near mining regions, authoritarian restrictions on mobility, housing, and jobs prevented sorting responses. We document persistent labor market impacts over three decades. Exposed individuals work less, earn lower wages, and retire earlier. Health is a key mechanism: infant mortality rises by 9\% and the long-run incidence of asthma and cardiopathy increases significantly.
Subjects: 
air pollution
labour supply
JEL: 
I15
J24
J60
N54
Q53
Document Type: 
Working Paper
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