Labor market impacts of land protection: The Northern Spotted Owl

Environmental policies often draw criticism due to their potential impacts on labor market outcomes. Previous work has studied sector-specific impacts following air quality regulations, or examined overall employment effects of land-use policies. In the case of the protection of the Northern Spotted Owl under the Endangered Species Act in 1990, millions of acres of highly productive federal timberland in the Pacific Northwest and northern California were set aside. Concerns regarding declining employment in the timber industry following the listing are often mentioned as a cautionary tale regarding future listings under the Act. However, disentangling the policy impact from other economic factors affecting employment such as recessions and sector-specific trends is challenging. We use a range of control groups to estimate the impact of the 1990 listing of the Northern Spotted Owl had on labor market outcomes in the Lumber and Wood Products sector. Our set of main results indicate long-run declines in timber industry employment of 13.9% using a regional perspective, 28.1% using a national perspective, and a 9.5% decline in the number of establishments. In the owl habitat range there were 114,600 timber employees in the pre-treatment period; about 1.4% of total employment in those counties. In terms of jobs, the declines represent around 16,000 or 32,000 timber jobs within the Pacific Northwest and northern California. We find heterogeneous effects with areas having larger shares of protected federal timberland experiencing larger declines in employment. Our findings indicate land protection policies may pose significant employment impacts to land-reliant industries.