Stephan Heblich

It's pretty much just before the heyday of industrialization.

And what did they see in 1881?

In 1881, we see a pronounced pattern where there's a much higher share of low-skilled workers on the east side of the city.

If you draw, let's say, a small circle around a chimney, you would expect in general to have a higher instance of low skilled workers just because commuting at that time was walking and they have to live somewhere close.

But even if you hold distance constant and draw a circle, you would then see that as you walked along the circle, once you get to the east, you will see that the instance of low skilled workers is in the range of one or two percentage points higher.

I cannot tell for sure if it's because of the coal smoke.

I think in the past it was mostly a sorting into industries.

From today's evidence, we know that there might be intergenerational effects and pollution might also have longer lasting effects that might affect cognitive capacities.

What we're seeing is that really polluted and really unpolluted neighborhoods, they are basically becoming even more extreme, either richer or poorer.

What we're finding is that one standard deviation increase in pollution would lead in the past to about 15% pollution.

higher share of low-skilled workers in neighborhoods, and then today we would see that this would go up to 20%.

The likely explanation is a classic case of path dependence.

You have the causes initially that the east side had these negative effects of pollution.

Poor people sorted there, and then the effects were cemented over time by additional investments, right?

Maybe you had a highway cutting off the east side from the west side, or you have poorer building structure.

As a result of that, you have a certain composition of residents.

You have less funding for schools.

You have less funding for other amenities.

And this is then the snowball effect.

In our paper, we find, for instance, that test scores in these east sides are lower and that crime instances are higher.