Peter Nilsson to publish in JPE

Professors at the IIES are used to publishing their research in top economics journals, but even so, we wanted to hear more from Peter about his recent research.

Can you briefly summarize what your paper is about?

The paper quantifies the impact of the phase-out of leaded gasoline, one of the first major environmental regulation implemented to limit human exposure to hazardous pollutants, on children’s outcomes from the cradle to the labor market.
Analyzing the effects of this policy in Sweden is interesting for two key reasons:
First, Swedish children experienced, in an international comparison, relatively low blood-lead levels even before the phase-out of leaded gasoline. This implies that the experiences of children growing up in Sweden during the 1970s and 80s are still relevant for a large share of the global population of children today.
Second, the possibility to follow a large sample of children across time would not be possible without the extraordinary administrative data available to researchers in Sweden. The admin data allows for a comprehensive analysis of the impact of early lead exposure on a range of outcomes during the children's first 30 years in life.
These two features of the Swedish setting allow us to provide evidence on how lead exposure at levels that are still common on a global scale affects children's life-trajectories. Our estimates indicate that the phase-out of leaded gasoline significantly improved children’s non cognitive skills, the probability to complete high school, as well as reducing the risk that they will be convicted of a crime later in life. In terms of earnings, the differences in average blood lead levels experienced by children born in 1972 and in 1985, i.e. just before vs just after the major reforms had been implemented, is predicted to have increased yearly earnings by about 5%, solely via the impact of lead exposure on high school completion.

What are the most important lessons policy makers can learn from your
paper?

Our research contributes to a growing literature showing that interventions and public policies that influence early childhood conditions can have a major impact on children long term outcomes. The equity-efficiency tradeoff that plagues so many policies, e.g. tax policy or welfare policy, can be avoided by targeting resources to disadvantaged children early in life. The reason is that early investments have the potential to influence cognitive and non cognitive skill development, which is so important in the modern labor market.
More specifically, we show that low levels of lead exposure primarily seem to affect long term outcomes via the impact on non-cognitive skills (conscientiousness, grit, social maturity, etc.) rather than via cognitive skills. This indicates that remediating interventions trying to improve the life trajectories of children exposed to low levels of lead will likely be most successful if they target these important but "softer" skills.

What can the general public learn from your paper?

The lead contamination disasters in Flint, Michigan and following the fire in the Notre Dame, Paris, are two recent examples of highly publicized events where well being has been affected by the fear of the consequences of children being exposed to lead. Given the relatively low exposure levels experienced by children in the affected areas compared to e.g. what children typically experienced in the early 1970s, a natural questions is whether and how worried parents really should be?
One of our key findings is that the effects of lead exposure seems to be non-linear, indicating that exposure at the lowest level are not influencing human capital outcomes or criminal behavior to any large extent. The existence of such thresholds is of key interest for parents and for policy purposes. However, while suggestive, further research from other settings and populations are needed in order to confirm the existence of the thresholds we document.

Are you continuing research in the same area or will you move on to
completely different projects?

Yes, we are continuing with projects aiming at providing evidence on which early childhood interventions are particularly effective in improving children’s life trajectories and in providing equality of opportunity.

The paper can be downloaded from here.