The Long-Run Effects of Recessions on Education and Income

The impacts of China's dual carbon policy on green innovation: Evidence from Chinese heavy-polluting enterprises

Encouraging enterprises to engage in green innovation is a potent strategy for reducing carbon emissions from production. As one of the largest carbon emitters, China has launched a series of policies to achieve carbon peaking and neutrality collectively referred to as China's dual carbon policy. However, existing research on the impact of China's dual carbon policy on green innovation by heavy-polluting enterprises is insufficient. To fill this gap, this study constructed a theoretical model to draw hypotheses about the impact of the dual carbon policy on enterprises' green innovation and verified this impact using a difference-in-differences model to conduct a quasi-natural experiment based on data from 2010 to 2022 from Chinese A-share-listed enterprises. The results indicate that the dual carbon policy had a significantly positive influence on green innovation in heavy-polluting enterprises. Moreover, environmental tax mediated this effect, while enterprises' total costs and subsidies positively moderated it. Additionally, the impact exhibited variations based on several key factors, including green patent type, carbon emissions, enterprise ownership structure, and Environmental, Social, and Governance ratings. This study supplements related research on the effects of environmental policy on green innovation and provides both theoretical and empirical support for adapting subsequent environmental policies.

Impact of in utero airborne lead exposure on long-run adult socio-economic outcomes: A population analysis using U.S. survey and administrative data

As a neurotoxin, early exposure to lead has long been assumed to affect socioeconomic outcomes well into adulthood. However, the empirical literature documenting such effects has been limited. This study documents the long-term effects of in utero exposure to air lead on adult socio-economic outcomes, including real earnings, disabilities, employment, public assistance, and education, using US survey and administrative data. Specifically, we match individuals in the 2000 US Decennial Census and 2001-2014 American Community Surveys to average lead concentrations in the individual's birth county during his/her 9 months in utero. We then estimate the effects of shocks to airborne lead conditional on observable characteristics, county fixed effects, county-specific time trends, and month-year fixed effects. We find a 0.5 μg/m3 decrease in air lead, representing the average 1975-85 change resulting from the passage of the U.S. Clean Air Act, is associated with an increase in earnings of 3.5%, or a present value, at birth, of $21,400 in lifetime earnings. Decomposing this effect, we find greater exposure to lead in utero is associated with an increase in disabilities in adulthood, an increase in receiving public assistance, and a decrease in employment. Looking at effects by sex, long-term effects for girls seem to fall on participation in the formal labor market, whereas for boys it appears to fall more on hours worked. This is the first study to document such long-term effects from lead using US data. We estimate the present value in 2020, from all earnings impacts from 1975 forward, to be $4.23 Trillion using a discount rate of 3%. In 2020 alone, the benefits are $252 B, or about 1.2% of GDP. Thus, our estimates imply the Clean Air Act's lead phase out is still returning a national dividend of over 1% every year.

Newborns during the crisis: Evidence from the 1980s' farm crisis

The sudden and jumping interest rate in the early 1980s triggered a severe economic crisis in the US agriculture sector. To identify the effects of wealth losses on the health condition of cohorts born in the midst of the crisis, this paper constructs an instrumental variable for wealth by exploiting the geographic variation in crop production and the timing of the shock. This study finds that wealth losses generates long-lasting health impacts for these newborns. A one percent wealth loss leads to an approximately 0.008 and 0.003 percentage point increase in the low and very low birth weight rates, respectively. In addition, cohorts growing up in areas of greater impacts have worse self-reported health condition before age 17 than others. They also have more metabolic-syndrome issues and smoke more regularly than other cohorts in adulthood. Lower expenditures on food and prenatal care might explain the negative health effects on cohorts born during the crisis. The study shows that households in areas with greater wealth losses have more declining expenditures on food at home and prenatal-care doctor visits.

Long COVID? Prospects for economic scarring from the pandemic

This paper examines the potential persistent effects (scarring) of the COVID-19 pandemic on the economy and the channels through which they may occur. Our findings from a broad set of historical recessions confirm that recessions are associated with persistent output losses and that the greatest scarring has occurred following financial crises. The amount of scarring following pandemic and epidemic recessions in the sample is in between that of typical recessions and financial crises. Results on the channels show that the productivity channel is important, as all types of recessions have been followed by persistent losses to total factor productivity.