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The Long-Term Effects of Air Pollution on Health and Labor Market Outcomes: Evidence from Socialist East Germany

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  • Moritz Lubczyk
  • Maria Waldinger

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.

Suggested Citation

  • Moritz Lubczyk & Maria Waldinger, 2025. "The Long-Term Effects of Air Pollution on Health and Labor Market Outcomes: Evidence from Socialist East Germany," CESifo Working Paper Series 12197, CESifo.
    • Handle: RePEc:ces:ceswps:_12197
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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