Water Works: Causes and Consequences of Safe Drinking Water in America

Since the 1974 Safe Drinking Water Act, the U.S. has spent \$2 trillion to provide safe drinking water, yet drinking water for 10--20 percent of Americans violates standards. We study trends, causes, and consequences of U.S. drinking water pollution, using 266 million readings on 1,250 pollutants over decades that we obtained from 48 states via dozens of Freedom of Information Act and associated requests. We link pollution to administrative Medicare data on older Americans' health outcomes. Three findings emerge. First, U.S. drinking water pollution has declined rapidly; the share of readings exceeding current health standards fell by half from 2003--2019. Unregulated pollutants declined more slowly. Low-income areas have higher pollution; Black and Hispanic communities have more complex patterns. Second, loans provided by the Safe Drinking Water Act to water systems reduce pollution. At the estimated average loan cost-effectiveness, these loans could eliminate pollution above health standards for \$46 annually per person. Third, these loans reduce mortality rates of older Americans. Although fiscal federalism cautions against federal funding of local public goods with few inter-jurisdictional externalities like drinking water, we estimate large benefits from Safe Drinking Water Act loans.