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Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector

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Author Info
Martin Gassebner () (Department of Management, Technology and Economics, ETH Zurich)
Noel Gaston () (School of Business, Bond University, Gold Coast, Queensland, Australia)
Michael Lamla () (Department of Management, Technology and Economics, ETH Zurich)

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Abstract

Deindustrialisation, stagnant real incomes of production workers and increasing inequality are latter-day features of many economies. It’s common to assume that such developments pressure policy-makers to relax environmental standards. However, when heavily polluting industries become less important economically, their political importance also tends to diminish. Consequently, a regulator may increase the stringency of environmental policies. Like some other studies, we find that declining industrial employment translates into stricter environmental standards. In contrast to previous studies, but consistent with our argument, we find that greater income inequality is associated with policies that promote a cleaner environment.

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Publisher Info
Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 06-130.

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Length: 47 pages
Date of creation: Mar 2006
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Handle: RePEc:kof:wpskof:06-130

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Related research
Keywords: Environmental regulations; deindustrialisation; income inequality; extreme bounds analysis;

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Find related papers by JEL classification:
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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Cited by:
(explanations, 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.)

  1. Michael Lamla, 2007. "Long-run Determinants of Pollution: A Robustness Analysis," KOF Working papers 07-164, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
  2. Martin Gassebner & Michael Lamla & Jan-Egbert Sturm, 2006. "Economic, Demographic and Political Determinants of Pollution Reassessed: A Sensitivity Analysis," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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