Economic Opportunity and the Environment

Publication Date


Grant Type

Early Career Research Award


Neighborhoods are an important determinant of economic opportunity in the United States, but how neighborhoods affect economic opportunity is less clear. Here we provide early evidence on the importance of environmental quality, which has been shown to affect human capital, labor force participation, and earnings, as a driver of economic opportunity and economic mobility. We combine 36 years of PM2.5 concentrations measured over roughly 8.6 million grid cells with individual-level administrative data provided by the U.S. Census Bureau and Internal Revenue Service (IRS). Initial results document new stylized facts, highlighting a strong negative correlation between early-life exposure to particulate matter and upward mobility. Early life exposure to environmental quality is one of the top 5 strongest correlates of upward mobility. This proposal requests funding to better understand this relationship. We propose two research designs exploiting the Moving-to-Opportunity randomized experiment and quasi-experimental variation in neighborhood change exploited in Chetty and Hendren (2018a). These designs will evaluate the effects of neighborhood change on PM2.5 exposure. Combining these estimates with the effects of PM2.5 on later life earnings we will calculate the contribution of PM2.5 to the overall effects of neighborhood change on later life earnings, documented in Chetty et al. (2016) and Chetty and Hendren (2018a).