Empirical Setting: The United States was in a recession at the start of WWI in 1914. Despite not entering the war until 1917, increased European demand for food and ammunition propelled the United States out of recession and stimulated 44 continuous months of economic expansion. Due to its crucial role in armament production—including machine guns, artillery, tanks, warships, barbed wire, and bayonets—the iron and steel industry was paramount to the war effort.
Before the war, Germany and Great Britain were the world’s leading producers of iron and steel. The war diminished these countries’ production capabilities and increased demand for steel, paving the way for U.S. dominance in the industry. The first figure shows U.S. exports of rolled steel from 1909-1925, illustrating the rapid increase in steel production in response to orders from belligerents.
Data: The majority of steel production occurred in Pittsburgh and Ohio. The second figure illustrates the spatial relationship between cities and steel production in the Ohio River water basin. Steel was produced along the Ohio River and its tributaries, with most production centered around Pittsburgh and Youngstown, upriver from the Ohio River’s source. Polluted water supplies, indicated by red hollow circles, include all supplies sourced from river water downriver from steel production. In contrast, cities with unpolluted supplies sourced their water from intakes located upriver from steel production, from unpolluted tributaries or rainwater, or from groundwater.
Empirical Strategy: My research design exploits the rapid and exogenous increase in steel production during WWI. Using a difference-in-differences identification strategy, I compare infant mortality risk between cities with polluted water supplies and control cities with unpolluted supplies before and after WWI.
Findings: The third figure presents results from an event study comparing infant mortality risk between cities exposed and unexposed to heavy metal water pollution from the steel industry. Prior to the steel boom (1909-1913), infant mortality risk was similar across treatment groups. After the steel boom (1915+), infant mortality risk in polluted cities increased by 3 percentage points on average compared to unpolluted cities.
Ecological Mechanisms: I document two ecological mechanisms that modulate this treatment effect. First, river systems most effectively mobilize heavy metals from sediment for transport downriver during periods of high flow rates, which occur in early spring in the Ohio River Watershed. Infants born during these months have a 2 percentage point higher mortality risk.
The second mechanism has an interesting historical context. Industrial water pollution was not seriously studied until after WWI, when complaints about unpalatable water inundated several city waterworks departments. The Ohio Department of Health identified phenol, a pollutant from the by-product coke industry, as the cause of tastes and odors in public water supplies. Complaints peaked in the winter months, when bacterial populations in river systems that typically degrade phenols decline.
The fourth figure is a 1922 newspaper advertisement for Distillata distilled water, showing that residents sought alternative water sources when the public water was unpalatable. This avoidance behavior inadvertently reduced infant exposure to heavy metals, attenuating the treatment effect for infants born during periods of unpalatable water supplies.
Net Health Impacts: To estimate the net impacts of the steel boom on infant mortality risk, I employ a triple difference approach that allows the effects of pollution to vary by economic exposure to the steel industry. The results, reported in the final table, indicate that the mortality consequences of the steel boom were greatest in highly steel-specializing cities (cities with both steel mills and blast furnaces), suggesting that concentrated local exposure to pollution outweighed the economic benefits of the steel boom. While downriver communities were also negatively impacted, the concentration of pollution was milder, resulting in significantly reduced mortality consequences, even without compensating economic benefits.
Finally, steel-specializing cities with unpolluted water supplies (e.g., well water) experienced a reduction in infant mortality risk, indicating a net benefit of industrialization when pollution can be avoided. I document increased wages for steel workers, positive wage spillovers for other manufacturing workers, and increased city health expenditures as key mechanisms.
Conclusion: Industrialization can drive health disparities, highlighting the critical role of public policy in promoting equitable growth.
