Toxic pollution and labour markets: uncovering Europe's left-behind places

This paper looks at the co-evolution of toxic industrial pollution and economic deprivation by means of spillovers from the plant's production activities. Geolocalised facility-level data from the European Pollutant Release and Transfer Register (E-PRTR) are used to calculate annual chemical-specific pollution, weighted by its toxicity. We combine the latter with regional data on employment, wages, and demographics sourced from Cambridge Econometrics, covering more than 1200 NUTS-3 regions in 15 countries, over the period 2007-2018. We employ quantile regressions to detect the heterogeneity across regions and understand the specificities of the 10th and 25th percentiles. Our first contribution consists in giving a novel and comprehensive account of the geography of toxic pollution in Europe, both at facility and regional level, disaggregated by sectors. Second, we regress toxic pollution (intensity effect) and pollutant concentration (composition effect) on labour market dimensions of left-behind places. Our results point to the existence of economic dependence on noxious industrialisation in left-behind places. In addition, whenever environmental efficiency-enhancing production technologies are adopted we observe associated labour-saving effects in industrial employment, but positive regional spillovers. Through the lens of economic geography, our results call for a new political economy of left-behind places within the realm of sustainable development.