We studied the health effects of economic development in heavily urbanized areas, where congestion poses a challenge to environmental conditions. We employed detailed data from air pollution and birth records around the metropolitan area of São Paulo, Brazil, between 2002 and 2009. During this period, the megacity experienced sustained growth marked by the increases in employment rates and ownership of durable goods, including automobiles. While better economic conditions are expected to improve infant health, air pollution that accompanies it is expected to do the opposite. To untangle these two effects, we focused on episodes of thermal inversion—meteorological phenomena that exogenously lock pollutants closer to the ground—to estimate the causal effects of in utero exposure to air pollution. Auxiliary results confirmed a positive relationship between thermal inversions and several air pollutants, and we ultimately found that exposure to inversion episodes during the last three months of pregnancy led to sizable reductions in birth weight and increases in the incidence of preterm births. Increased pollution exposure induced by inversions also has a significant impact over fetal survival as measured by the size of live-birth cohorts.
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