Environmental and Resource Economics

, Volume 40, Issue 1, pp 37–52 | Cite as

Reconsidering the Impact of the Environment on Long-run Growth when Pollution Influences Health and Agents have a Finite-lifetime



Using an overlapping generation model à la Blanchard (1985, J Polit Econ 93:223–247) with human capital accumulation, we demonstrate that the influence of the environment on optimal growth in the long-run may be explained by the detrimental effect of pollution on life expectancy. We also show that, in such a case, greener preferences are growth- and welfare-improving in the long-run even if the ability of the agents to learn is independent of pollution and utility is additively separable. Finally, we establish that a minimum environmental policy is required to obtain a sustainable equilibrium in the market economy and that it is possible to implement a win–win environmental policy.


Growth Environment Overlapping generations Human capital Health 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Behrman J, Rosenzweig M (2002) Does increasing women’s schooling raise the schooling of the next generation? Am Econ Rev 92(1):324–334Google Scholar
  2. Bell M, Davis D (2001) Reassessment of the lethal London fog 1952: novel indicators of acute and chronic consequences of acute exposure to air pollution. Environ Health Perspect 109(1):389–394CrossRefGoogle Scholar
  3. Black S, Devereux P, Salvanes K (2003) Why the apple doesn’t fall far: understanding intergenerational transmission of knowledge. NBER Working paper #10066, Cambridge, MAGoogle Scholar
  4. Blanchard O (1985) Debt, deficits and finite horizon. J Polit Econ 93:223–247CrossRefGoogle Scholar
  5. Bloom D, Canning D (2005) Health and economic growth: micro and macro evidence. Working papers 42, CDDRL, Stanford IISGoogle Scholar
  6. Brunekreef B, Holgate ST (2002) Air pollution and health: review. Lancet 360:1233–1242CrossRefGoogle Scholar
  7. Chay K, Greenstone M (2003) The impact of air pollution on infant mortality: evidence from geographic variation in pollution shocks induced by a recession. Quart J Econ 118:1121–1167CrossRefGoogle Scholar
  8. Chen S, Liao C (2005) Health risk assessment on humans exposed to environmental polycyclic aromatic hydrocarbons pollution sources. Sci Total Environ 366:112–123Google Scholar
  9. Chevalier A (2004) Parental education and children’s education: a natural experiment. IZA Discussion Paper #1153, Institute for the Study of Labor, Bonn, GermanyGoogle Scholar
  10. Currais L, Rivera B (1999) Income variation and health: direct impact or reverse causation. Appl Econ Lett 6:761–764CrossRefGoogle Scholar
  11. Currais L, Rivera B (2003) The effect of health investment on growth: a causality analysis. Int Adv Econ Res 9(4):312–324CrossRefGoogle Scholar
  12. Daniels M, Dominici F, Samet J, Zeger S (2000) Estimating particulate matter–mortality, dose–response curves and threshold levels: an analysis of daily time series for the 20 largest US cities. Am J Epidemiol 152:397–406CrossRefGoogle Scholar
  13. DingW, Lehrer F, Rosenquist J, Audrain-McGovern J (2005) The impact of health on academic performance: new evidence using genetic markers. Technical report, University of PennsylvaniaGoogle Scholar
  14. Dominici F, Daniels M, Zeger S, Samet J (2002) Air pollution and mortality: estimating regional and national dose–response relationships. J Am Stat Assoc 97(457):100–135CrossRefGoogle Scholar
  15. Dominici F, Samet J, Zeger S (2000) Combining evidence on air pollution and daily mortality from the 20 largest US cities: a hierarchical modelling strategy. J Roy Stat Soc Ser A 163(3):263–302CrossRefGoogle Scholar
  16. Dominici F, Sheppard L, Clyde M (2003) Health effects of air pollution: a statistical review. Int Stat Rev 71:243–276CrossRefGoogle Scholar
  17. Evans MF, Smith V (2005) Do new health conditions support mortility-air pollution effects. J Environ Econ Manage 50:496–518CrossRefGoogle Scholar
  18. Gradus R, Smulders S (1993) The trade-off between environmental care and long-term growth-pollution in three prototype growth models. J Econ 58(1):25–51Google Scholar
  19. Grossman M, Kaestner R (1997) Effects of education on health. In: Behrman J, Stacey N (eds) The social benefits of education. University of Michigan PressGoogle Scholar
  20. HEI International Scientific Oversight Committee (2004) Health effects of outdoor air pollution in developing countries of Asia: a literature review. Technical report, Special Report 15. Health Effects Institute, Boston, MAGoogle Scholar
  21. Koop G, Tole L (2004) Measuring the health effects of air pollution: To what extent can we really say that people are dying from bad air. J Environ Econ Manage 47(1):30–54CrossRefGoogle Scholar
  22. Kunzli N, Kaiser R, Medina S, Studnicka M, Chanel O, Filliger P, Herry M, Horak F Jr, Puybonnieux-Texier V, Quénel P, Schneider J, Seethaler R, Vergnaud J, Sommer H (2000) Public-health impact of outdoor and traffic-related air pollution: a European assessment. Lancet 356:795–801CrossRefGoogle Scholar
  23. Kurttio P, Pukkala E, Kahelin H, Auvinen A, Pekkanen J (1999) Arsenic concentrations in well water and risk of bladder and kidney cancer in Finland. Environ Health Perspect 107(9):705–710CrossRefGoogle Scholar
  24. López-Casanovas G, Rivera B, CurraisL(2005) Health and economic growth: findings and policy implications. MIT PressGoogle Scholar
  25. Lucas R (1988) On the mechanisms of economic development. J Monet Econ 22:3–42CrossRefGoogle Scholar
  26. Mayer-Foulkes D (2005) Human development traps and economic growth. In: López-Casanovas G, Rivera B, Currais L (eds) Health and economic growth: findings and policy implications. MIT PressGoogle Scholar
  27. Morris R (1995) Environmental health issues. Environ Health Perspect 103(S8):225–231CrossRefGoogle Scholar
  28. Nadal M, Schuhmacher M, Domingo J (2004) Metal pollution of soils and vegetation in an area with petrochemical industry. Sci Total Environ 321:59–69CrossRefGoogle Scholar
  29. Oreopoulos P, Page M, Huff Stevens A (2003) Does human capital transfer from parent to child? The intergenerational effects of compulsory schooling. NBER Working paper #10164, Cambridge, MAGoogle Scholar
  30. Oueslati W (2002) Environmental policy in an endogenous growth model with human capital and endogenous labor supply. Econ Model 19:487–507CrossRefGoogle Scholar
  31. PauluC,Aschengrau A, OzonoffD (1999) Tetrachloroethylene-contaminated drinkingwater in Massachusetts and the risk of colon-rectum, lung, and other cancers. Environ Health Perspect 107(4):265–271CrossRefGoogle Scholar
  32. Plug E (2004) Estimating the effect of mother’s schooling on children’s schooling using a sample of adoptees. Am Econ Rev 94(1):358–368CrossRefGoogle Scholar
  33. Pope C, Burnett R, Thun M, Calle E, Krewski D, Ito K, Thurston G (2002) Lung cancer, cardiopulmonary mortality, and long-term exposure to fine particulate air pollution. J Am Med Assoc 287:1132–1141CrossRefGoogle Scholar
  34. Schuhmacher M, Domingo J (2006) Long-term study of environmental levels of dioxins and furans in the vicinity of a municipal solid waste incinerator. Environ Int 32:397–404CrossRefGoogle Scholar
  35. Valent F, Little D, Bertollini R, Nemer L, Barbone F, Tamburlini G (2004) Burden of disease attributable to selected environmental factors and injury among children and adolescents in Europe. Lancet 363:2032– 2039CrossRefGoogle Scholar
  36. van Ewijk C,Wijnbergen S (1995) Can abatement overcome the conflict between environment and economic growth?. De Economist 143(2):197–216CrossRefGoogle Scholar
  37. Vellinga N (1999) Multiplicative utility and the influence of environmental care on the short-term economic growth rate. Econ Model 16(3):307–330CrossRefGoogle Scholar
  38. Vellinga N, Withagen C (2001) Endogenous growth and environmental policy. Growth Change 32:92–109CrossRefGoogle Scholar
  39. World Health Organization (2002) Reducing risks, promoting healthy life. The World Health Report.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2007

Authors and Affiliations

  1. 1.Nantes Atlantique Université, Laboratoire d’Économie de Nantes (LEN)Université de NantesNantes Cedex 3France

Personalised recommendations