Trade, pollution and mortality in China

Abstract

Did the rapid expansion of Chinese exports between 1990 and 2010 contribute to the country's worsening environmental quality? We exploit variation in local industrial composition to gauge the effect on pollution and health outcomes of export expansion due to the decline in tariffs faced by Chinese exporters. In theory, rising exports can increase pollution and mortality due to increased output, but they may also raise local incomes, which can in turn promote better health and environmental quality. The paper teases out these competing effects by constructing two export shocks at the prefecture level: (i) the pollution content of export expansion and (ii) the export expansion in dollars per worker. We find that the pollution content of exports affects pollution and mortality: a one standard deviation increase in the shock increases infant mortality by 4.1 deaths per thousand live births, which is about 23% of the standard deviation of infant mortality change during the period. The dollar value of export expansion reduces mortality by 1.2 deaths, but the effect is not statistically significant. We show that the channel through which exports affect mortality is pollution concentration. We find a negative, but insignificant effect on pollution of the dollar-value export shocks, a potential “technique” effect whereby higher income drives demand for clean environment. Finally, we find that only infant mortality related to cardio-respiratory conditions responds to exports shocks, while deaths due to accidents and other causes are not affected.