Essays in Environmental Economics and Human Capital

Chapter 1: This paper offers new causal evidence on how the timing of prenatal temperature shocks affects fetal health, sex ratio at birth, and early-age human capital. Analyzing data on nearly 2 million live births from sub-Saharan African countries and exploiting exogenous spatial and temporal variation in monthly temperature, we uncover three findings. First, we find that a cold temperature shock decreases the likelihood of a male birth. This effect is non-linear, being larger in the first and third trimesters of pregnancy. It is also highly heterogeneous, being larger for older women, higher parity births, and rural areas. Second, combining our empirical estimates with a climate model, we find that the number of fetal deaths caused by climate change will rise from 200 to 400 per 100,000 live births by 2050 throughout sub-Saharan Africa. Third, in contrast to their differential effect on fetal mortality, prenatal temperature shocks increase infant mortality more for females than for males, suggesting that only healthier male fetuses survive to adverse in utero conditions. Our analysis implies that the design of policies to avert the negative impacts of climate change on children should account for stages of fetal development. Chapter 2: Despite its enormous individual and social costs; the fundamental and long- run causes of cognitive aging remain understudied. We study the causal effect of in-utero temperature exposure on cognition during old age. Combining unique data on South African adults between 40 and 99 years of age with geospatial information on historical temperatures, our identification strategy exploits exogenous, within-municipality-of-birth, month-to-month variations in temperature, and controls for contemporaneous weather and location at the time of survey administration. We find that temperature in the first trimester of pregnancy negatively affects the cognitive function score later in life, but temperature in the second and third trimesters has a positive effect on adults cognitive function score. These differing effects result in an overall U-shaped relationship between prenatal exposure to temperature and cognition. This non-linear relationship is robust across measures of memory, reasoning, and information processing speed. Our findings are consistent with the fetal programming theory, which holds that the first trimester of pregnancy is the most crucial window of brain formation. In accordance with this theory, brain development occurring in the first trimester of pregnancy would therefore have the highest vulnerability to external shocks. Heterogeneity analysis reveals that the effect of prenatal temperature on cognition is larger for men, individuals over 75 years of age, and individuals with low social capital. Analyzing causal mechanisms, we find that prenatal temperature affects key determinants of individuals' cognitive reserve. We also find that exposure to drought during the first trimester of pregnancy and reduced sleep during adulthood are other potential channels through which the effects of prenatal exposure to temperature operate. Chapter 3: A large literature seeking to understand the labor market impacts associated with the clean energy transitions broadly finds opposite effects. On the one hand, a net positive impact on the workforce i.e. the new green jobs created in renewable energy sectors will compensate for the jobs lost in fossil-fuel sectors, while on the other hand, the so-called regulated dirty energy sector will reduce the fraction of workers hired. However, empirical and simulation models typically ignore transitional impacts associated with environmental regulations on labour. These relate to how workers adjust over time to environmental regulations, not just the steady state impact that is the focus of prior studies. We evaluate an environmental regulation (Ontario coal-fired electricity generating plants phase-out) regarding its transitional and long-term impacts on employee's outcomes including (i) wages; (ii) unemployment insurance; (iii) sector mobility; and (iv) geographic location. Using the Longitudinal Worker File (LWF) and Postal Codes Conversion File (PCCF) maintained by Statistics Canada, we estimate the labor market impacts of clean energy policy by comparing employees from affected coal plants to a comparable group of employees from non-affected plants. We find that, workers exposed to Ontario phase-out coal policy have earned on average 7000 $ CAD yearly less compared to those who weren't exposed. Our findings are consistent across a set of alternative specifications and robustness checks. Moreover, results from the event study approach suggest that the regulation leads to labor costs with the de- cline of wages just in transition. We provide supportive evidence on large labor costs due to environmental regulation policy and shed lights on the importance of reforms and training programs to support workers during the transition.

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