Consequences of Rapid Structural Change - Evidence from Hydropower Expansions

Abstract

The establishment of hydroelectric power plants resulted in a rapid structural transformation of Norwegian municipalities around the beginning of the 20th century. Using a novel dataset linking individuals born between 1890 and 1910 to historic death data, I find that experiencing childhood in rapidly transforming local areas leads to an increase of ten months in age at death for men. This effect is entirely driven by individuals born into higher socioeconomic status households. I find that incomes, manufacturing, immigration and economic inequality in local areas in the short/medium-term increase after the introduction of hydropower, while public health deteriorates at the same time. This suggests that, in the long term, economic development through structural transformation outweighs the negative consequences of a deteriorating public health environment and thereby increases the lifespan of individuals.