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Environmental Regulation and Labor Demand: Evidence from the South Coast Air Basin

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Author Info
Eli Berman
Linda T. Bui

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Abstract

The devolved nature of environmental regulation provides an excellent opportunity for" estimating the effects of regulation on employment, by generating rich variation in regulation" across regions and over time. We exploit this variation using direct measures of regulation and" plant data. We estimate the employment effects of an unprecedented increase in air quality" regulation in the Los Angeles region, using unregulated plants in other regions years for comparison. While environmental regulation is generally thought to reduce" employment, economic theory is ambiguous on this point, since pollution abatement technologies" may be labor using. We find that air quality regulation induced very expensive investments in" abatement capital for individual plants, especially for oil refineries. Despite these high costs we" find no evidence that environmental regulation decreased labor demand induced plant exit and dissuaded plant entry. If anything, air quality regulation probably inc-" reased employment slightly.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6299.

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Date of creation: Dec 1997
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Handle: RePEc:nbr:nberwo:6299

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C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

References listed on IDEAS
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. Wayne B. Gray & Ronald J. Shadbegian, 1993. "Environmental Regulation and Manufacturing Productivity at the Plant Level," NBER Working Papers 4321, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Wayne B Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," Working Papers 97-8, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  3. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law & Economics, University of Chicago Press, vol. 30(2), pages 239-64, October.
  4. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June. [Downloadable!] (restricted)
  5. Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
  9. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
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  10. 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. [Downloadable!] (restricted)
  11. Pashigian, B Peter, 1984. "The Effect of Environmental Regulation on Optimal Plant Size and Factor Shares," Journal of Law & Economics, University of Chicago Press, vol. 27(1), pages 1-28, April.
  12. Christainsen, Gregory B. & Haveman, Robert H., 1981. "The contribution of environmental regulations to the slowdown in productivity growth," Journal of Environmental Economics and Management, Elsevier, vol. 8(4), pages 381-390, December. [Downloadable!] (restricted)
  13. Mary L Streitwieser, 1996. "Evaluation And Use Of The Pollution Abatement Costs And Expenditures Survey Micro Data," Working Papers 96-1, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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(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. Arik Levinson, 2001. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 131-158 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  2. Parry, Ian, 2003. "Fiscal Interactions and the Case for Carbon Taxes over Grandfathered Carbon Permits," Discussion Papers dp-03-46, Resources For the Future. [Downloadable!]
    Other versions:
  3. Gilles Duranton & Laurent Gobillon & Henry G Overman, 2006. "Assessing the effects of local taxation using microgeographic data," Working Papers tecipa-247, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  4. Sedigh, Golnaz, 2008. "Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries," MPRA Paper 10003, University Library of Munich, Germany. [Downloadable!]
  5. Parry, Ian, 2002. "Adjusting Carbon Cost Analyses to Account for Prior Tax Distortions," Discussion Papers dp-02-47, Resources For the Future. [Downloadable!]
  6. Wayne B. Gray & Ronald J. Shadbegian, 2002. "When Do Firms Shift Production Across States to Avoid Environmental Regulation?," NBER Working Papers 8705, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Michael Greenstone, 2001. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 & 1977 Clean Air Act Amendments and the Census of Manufactures," NBER Working Papers 8484, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Badri Narayanan G, 2005. "Effects of trade liberalisation, environmental and labour regulations on employment in India's organised textile sector," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2005-005, Indira Gandhi Institute of Development Research, Mumbai, India. [Downloadable!]
  9. 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. [Downloadable!]
    Other versions:
  10. repec:bep:eaptop:v:7:y:2007:i:1:p:1668-1668 is not listed on IDEAS
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