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Regressive effects of regulation on wages

Author

Listed:
  • James B. Bailey

    (Providence College)

  • Diana W. Thomas

    (Creighton University)

  • Joseph R. Anderson

    (Creighton University)

Abstract

A growing body of literature analyzing the distributive consequences of regulation suggests that regulation may have particularly detrimental effects on lower-income households. Regulation can be regressive if it represents the preferences of the wealthy while imposing costs on all households. The specific channel through which regulation may impose costs on lower-income households is its effects on prices and wages. In this issue, Chambers et al. (Public Choice. https://doi.org/10.1007/s11127-017-0479-z , 2017) investigate the impact of regulation on prices. They find that regulation raises consumer prices; regulatory interventions therefore are regressive because lower income consumers tend to spend larger percentages of their budgets on regulated goods and services. In this paper, we seek to analyze the effect of regulation on wages across different income levels and occupations.

Suggested Citation

  • James B. Bailey & Diana W. Thomas & Joseph R. Anderson, 2019. "Regressive effects of regulation on wages," Public Choice, Springer, vol. 180(1), pages 91-103, July.
    • Handle: RePEc:kap:pubcho:v:180:y:2019:i:1:d:10.1007_s11127-018-0517-5
    DOI: 10.1007/s11127-018-0517-5
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    References listed on IDEAS

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    Cited by:

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    2. Marc T. Law & Patrick A. McLaughlin, 2022. "Industry size and regulation: Evidence from US states," Public Choice, Springer, vol. 192(1), pages 1-27, July.
    3. Chambers, Dustin & O'Reilly, Colin, 2022. "Regulation and income inequality in the United States," European Journal of Political Economy, Elsevier, vol. 72(C).
    4. Edward Peter Stringham, 2023. "Banking regulation got you down? The rise of fintech and cryptointermediation in Africa," Public Choice, Springer, vol. 197(3), pages 455-470, December.
    5. Aaron J. Staples & Dustin Chambers & Trey Malone, 2022. "How many regulations does it take to get a beer? The geography of beer regulations," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1197-1210, October.
    6. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
    7. Bavaro, Michele & Patriarca, Fabrizio, 2022. "Referrals, intergenerational mobility and human capital accumulation," Economic Modelling, Elsevier, vol. 110(C).
    8. Staples, Malone & Chambers, Dustin & Malone, Trey, 2020. "The economic geography of beer regulations," Center for Growth and Opportunity at Utah State University 307180, Center for Growth and Opportunity.
    9. Joshua C. Hall & Shishir Shakya, 2019. "Federal Regulations and U.S. Energy Sector Output," Working Papers 19-02, Department of Economics, West Virginia University.
    10. Michael D. Thomas & Nathan A. Miller, 2021. "Experimental Public Policy, Discovery, and Behavioral Taxation," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Winter 20), pages 1-20.
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    12. Kim Oosterlinck & Anne-Sophie Radermecker, 2021. "Regulation or Reputation? Evidence from the Art Market," Working Papers CEB 21-006, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Regulation; Wages; Inequality; Employment;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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