The Silver Lining of Rust Belt Manufacturing Decline

Abstract

Between 1969 and 1996 manufacturing employment declined by 32.9% in the Rust Belt, leading to severe dislocations in cities specialized in manufacturing. However, one silver lining of reduced manufacturing activity is improved environmental quality. This paper exploits a unique merger of air quality and county manufacturing data to quantify manufacturing's pollution intensity by industry and then uses these estimates to judge which Rust Belt cities experienced large environmental improvements. It uses valuation estimates to assess the economic magnitude of the pollution reduction.