Congestion charge, air pollution and children’s school attendance: benefitting the poor

Air pollution negatively affects individuals’ health and human capital accumulation. For example, students school performance is hampered by air pollution as it decreases cognitive abilities and increases absences. Moreover, low-income students are the most exposed and vulnerable to the negative effects of air pollution lacking protective resources and suffering from pre-existing health conditions. Here, we inquire how more stringent traffic regulations implemented in Central London from late 2015 affected pollution levels and school absences. First, we observe a substantive decrease in pollution in the area affected by the regulations from 2016. Secondly, we use a Difference in Difference approach to estimate the causal effect of the policy on air pollution and school absences. For all schools combined, findings do not show any substantive improvement in attendance. However, when looking at the heterogeneous effects of the policy, we observe a larger decrease in absences for Low socioeconomic status (SES) students. Moreover, we find a positive spillover effect for schools just outside the area targeted by the policy. Consequently, the findings highlight the efficacy of environmental policy in diminishing pollution levels and to benefit the poor.