The Impact of Industrial Pollution on City Growth: Lessons from the "Dark Satanic Mills"

Walker Hanlon, University of California, Los Angeles

Growing industries create jobs and drive city growth, but may also generate pollution, an endogenous disamenity that drives workers and firms away. This study provides the first assessment of the impact of these positive and negative effects on long-run city growth by studying the impact of industrial coal use in British cities from 1851-1911. I begin by constructing a measure of industrial coal use in 25 British cities in each decade. I show that coal use was an important disamenity in these cities, with a substantial positive effect on mortality. I then introduce an approach that allows me to separate the negative impact of this endogenous disamenity on city size from the positive impact of industry employment growth. My approach suggests that for an industry using the average amount of coal per worker in a city, the disamenity reduces the positive effect of industry employment growth by at least 8%.