Jobs Versus the Environment: An Industry-Level Perspective
AbstractThe possibility that workers could be adversely affected by environmental policies imposed on heavily regulated industries has led to claims of a "jobs versus the environment" trade-off by both business and labor leaders. The present research examines this claim at the industry level for four heavily polluting industries: pulp and paper mills, plastic manufacturers, petroleum refiners, and iron and steel mills. By focusing on labor effects across an entire industry, we construct a measure relevant to the concerns of key stakeholders, such as labor unions and trade groups. We decompose the link between environmental regulation and employment into three distinct components: factor shifts to more or less labor intensity, changes in total expenditures, and changes in the quantity of output demanded. We use detailed plant-level data to estimate the key parameters describing factor shifts and changes in total expenditures. We then use aggregate time-series data on industry supply shocks and output responses to estimate the demand effect. We find that increased environmental spending generally does not cause a significant change in industry-level employment. Our average across all four industries is a net gain of 1.5 jobs per $1 million in additional environmental spending, with a standard error of 2.2 jobsâan insignificant effect. In the plastics and petroleum sectors, however, there are small but significantly positive effects: 6.9 and 2.2 jobs, respectively, per $1 million in additional expenditures. These effects can be linked to favorable factor shiftsâenvironmental spending is more labor intensive than ordinary productionâand relatively inelastic estimated demand.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 43 (2002)
Issue (Month): 3 (May)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870
Other versions of this item:
- Pizer, William & Morgenstern, Richard & Shih, Jhih-Shyang, 1999. "Jobs Versus the Environment: An Industry-level Perspective," Discussion Papers dp-99-01-rev, Resources For the Future.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Randy A. Becker & J. Vernon Henderson, 1999.
"Costs of Air Quality Regulation,"
NBER Working Papers
7308, National Bureau of Economic Research, Inc.
- Jerry A. Hausman, 1983.
"Taxes and Labor Supply,"
NBER Working Papers
1102, National Bureau of Economic Research, Inc.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977.
"Monopolistic Competition and Optimum Product Diversity,"
American Economic Review,
American Economic Association, vol. 67(3), pages 297-308, June.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
- repec:fth:harver:1487 is not listed on IDEAS
- Berman, Eli & Bui, Linda T. M., 2001.
"Environmental regulation and labor demand: evidence from the South Coast Air Basin,"
Journal of Public Economics,
Elsevier, vol. 79(2), pages 265-295, February.
- Eli Berman & Linda T. Bui, 1997. "Environmental Regulation and Labor Demand: Evidence from the South Coast Air Basin," Papers 0082, Boston University - Industry Studies Programme.
- Berman, E. & Bui, L.T., 1997. "Environmental Regulation and Labor demand: Evidence from the South Coast Air Basin," Papers 82, Boston University - Industry Studies Programme.
- Diewert, W Erwin, 1978. "Superlative Index Numbers and Consistency in Aggregation," Econometrica, Econometric Society, vol. 46(4), pages 883-900, July.
- Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
- Hazilla, Michael & Kopp, Raymond J, 1990. "Social Cost of Environmental Quality Regulations: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 853-73, August.
- Gollop, Frank M & Roberts, Mark J, 1983. "Environmental Regulations and Productivity Growth: The Case of Fossil-Fueled Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 654-74, August.
- Henderson, J Vernon, 1996.
"Effects of Air Quality Regulation,"
American Economic Review,
American Economic Association, vol. 86(4), pages 789-813, September.
- Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
- Caves, Douglas W & Christensen, Laurits R, 1980. "Global Properties of Flexible Functional Forms," American Economic Review, American Economic Association, vol. 70(3), pages 422-32, June.
- Eli Berman & Linda T. Bui, 1997. "band Labor Demand: Evidence from the South Coast Air Basin," NBER Working Papers 6299, National Bureau of Economic Research, Inc.
- Perroni, Carlo & Rutherford, Thomas F, 1998. "A Comparison of the Performance of Flexible Functional Forms for Use in Applied General Equilibrium Modelling," Computational Economics, Society for Computational Economics, vol. 11(3), pages 245-63, June.
- Gray, Wayne B, 1987. "The Cost of Regulation: OSHA, EPA and the Productivity Slowdown," American Economic Review, American Economic Association, vol. 77(5), pages 998-1006, December.
- Zvi Griliches & Jerry A. Hausman, 1984.
"Errors in Variables in Panel Data,"
NBER Technical Working Papers
0037, National Bureau of Economic Research, Inc.
- Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
- Virginia D. McConnell & Robert M. Schwab, 1990. "The Impact of Environmental Regulation on Industry Location Decisions: The Motor Vehicle Industry," Land Economics, University of Wisconsin Press, vol. 66(1), pages 67-81.
- Jorgenson, Dale W., 1986. "Econometric methods for modeling producer behavior," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 31, pages 1841-1915 Elsevier.
- Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 5-29, October.
- Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
- Aldy, Joseph Edgar & Pizer, William, 2011.
"The Competitiveness Impacts of Climate Change Mitigation Policies,"
5688779, Harvard Kennedy School of Government.
- Joseph E. Aldy & William A. Pizer, 2011. "The Competitiveness Impacts of Climate Change Mitigation Policies," NBER Working Papers 17705, National Bureau of Economic Research, Inc.
- Aldy, Joseph E. & Pizer, William A., 2011. "The Competitiveness Impacts of Climate Change Mitigation Policies," Working Paper Series rwp11-047, Harvard University, John F. Kennedy School of Government.
- Kim, Kijin, 2013. "The Effects of the Clean Air Act on Local Industrial Wages," 6th Annual CRAE, April 5-6, 2013, Columbus, Ohio 147489, Midwest Graduate Student Conference on Regional and Applied Economics (CRAE), The Ohio State University, Department of Agricultural, Environmental and Development Economics.
- Lynn Mainwaring & Richard Jones & David Blackaby, 2006. "Devolution, sustainability and GDP convergence: Is the Welsh agenda achievable?," Regional Studies, Taylor & Francis Journals, vol. 40(6), pages 679-689.
- Timothy J. Bartik, 2013. "Social Costs of Jobs Lost Due to Environmental Regulations," Upjohn Working Papers and Journal Articles 13-193, W.E. Upjohn Institute for Employment Research.
- Wayne B. Gray & Ronald J. Shadbegian & Chunbei Wang & Merve Cebi, 2013. "Do EPA Regulations Affect Labor Demand? Evidence From the Pulp and Paper Industry," Working Papers 13-39, Center for Economic Studies, U.S. Census Bureau.
- Ronald J. Shadbegian & Wayne B. Gray & Chumbei Wang & Merve Cebi, 2013. "Do EPA Regulations Affect Labor Demand? Evidence from the Pulp and Paper Industry," NCEE Working Paper Series 201303, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2013.
- Sen, Anindita, 2012. "Eco-Labelling and the Labour Market," MPRA Paper 49169, University Library of Munich, Germany.
- Matthew Cole & Robert Elliott & Joanne Lindley, 2009.
"Dirty money: Is there a wage premium for working in a pollution intensive industry?,"
Journal of Risk and Uncertainty,
Springer, vol. 39(2), pages 161-180, October.
- Matthew A Cole & Robert J R Elliott & Joanne K Lindley, 2009. "Dirty Money: Is there a Wage Premium for Working in a Pollution Intensive Industry," Discussion Papers 09-13, Department of Economics, University of Birmingham.
- Pizer, William & Kopp, Raymond, 2003.
"Calculating the Cost of Environmental Regulation,"
dp-03-06, Resources For the Future.
- Marcus Wagner, 2004. "The Porter Hypothesis Revisited: A Literature Review of Theoretical Models and Empirical Tests," Public Economics 0407014, EconWPA.
- Randy A. Becker & Carl Pasurka, Jr. & Ronald J. Shadbegian, 2012.
"Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey,"
12-25r, Center for Economic Studies, U.S. Census Bureau, revised Aug 2013.
- Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
- Randy A. Becker & Ronald J. Shadbegian & Carl Pasurka, 2013. "Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey," NCEE Working Paper Series 201206, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2013.
- Kneller, Richard & Manderson, Edward, 2012. "Environmental regulations and innovation activity in UK manufacturing industries," Resource and Energy Economics, Elsevier, vol. 34(2), pages 211-235.
- repec:cen:wpaper:12-25 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.