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Environmental Regulation and Labor Reallocation: Evidence from the Clean Air Act

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  • W. Reed Walker

Abstract

This paper uses newly available data on plant level regulatory status linked to the Census Longitudinal Business Database to measure the impact of changes in county level environmental regulations on plant and sector employment levels. Estimates from a variety of specifications suggest a strong connection between changes in environmental regulatory stringency and both employment growth and levels in the affected sectors. The preferred estimates suggest that changes in county level regulatory status due to the 1990 Clean Air Act Amendments reduced the size of the regulated sector by as much as 15 percent in the 10 years following the changes.

Suggested Citation

  • W. Reed Walker, 2011. "Environmental Regulation and Labor Reallocation: Evidence from the Clean Air Act," American Economic Review, American Economic Association, vol. 101(3), pages 442-447, May.
  • Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:442-47
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.3.442
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    References listed on IDEAS

    as
    1. Becker, Randy A., 2005. "Air pollution abatement costs under the Clean Air Act: evidence from the PACE survey," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 144-169, July.
    2. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 819-863.
    3. Robert W. Hahn & Richard L. Schmalensee & Roger Noll & Robert Stavins & Lester B. Lave & George C. Eads & Milton Russell & V. Kerry Smith & Maureen L. Cropper & Paul R. Portney & Kenneth J. Arrow, 1996. "Benefit-Cost Analysis in Environmental, Health, and Safety Regulation," Books, American Enterprise Institute, number 51790.
    4. W. Reed Walker, 2013. "The Transitional Costs of Sectoral Reallocation: Evidence From the Clean Air Act and the Workforce," The Quarterly Journal of Economics, Oxford University Press, pages 1787-1835.
    5. Michael Greenstone, 1998. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufacturers," Working Papers 787, Princeton University, Department of Economics, Industrial Relations Section..
    6. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
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    Cited by:

    1. Robert J R Elliott & Joanne K Lindley, 2014. "Green Jobs and Growth in the United States: Green Shoots or False Dawn?," Discussion Papers 14-09, Department of Economics, University of Birmingham.
    2. Raitano, Michele & Romano, Eleonora & Zoppoli, Pietro, 2017. "Renewable energy sources in Italy: Sectorial intensity and effects on earnings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 117-127.
    3. Gray, Wayne B. & Shadbegian, Ronald J. & Wang, Chunbei & Meral, Merve, 2014. "Do EPA regulations affect labor demand? Evidence from the pulp and paper industry," Journal of Environmental Economics and Management, Elsevier, pages 188-202.
    4. Francesco Vona & Giovanni Marin & Davide Consoli, 2016. "Measures, drivers and effects of green employment : evidence form US local labor markets, 2006-2014," Sciences Po publications 2016-22, Sciences Po.
    5. repec:eee:jeeman:v:86:y:2017:i:c:p:277-294 is not listed on IDEAS
    6. E. Mark Curtis, 2014. "Who Loses Under Power Plant Cap-and-Trade Programs?," NBER Working Papers 20808, National Bureau of Economic Research, Inc.
    7. Sanders, Nicholas J. & Stoecker, Charles, 2015. "Where have all the young men gone? Using sex ratios to measure fetal death rates," Journal of Health Economics, Elsevier, vol. 41(C), pages 30-45.
    8. Francesco Vona & Giovanni Marin & Davide Consoli & David Popp, 2015. "Green Skills," NBER Working Papers 21116, National Bureau of Economic Research, Inc.
    9. Matthew Gibson, 2016. "Regulation-Induced Pollution Substitution," Department of Economics Working Papers 2016-04, Department of Economics, Williams College.
    10. Tanaka, Shinsuke, 2015. "Environmental regulations on air pollution in China and their impact on infant mortality," Journal of Health Economics, Elsevier, vol. 42(C), pages 90-103.
    11. Gibson, Matthew, 2014. "Dirty and perverse: regulation-induced pollution substitution," University of California at San Diego, Economics Working Paper Series qt6tn7t0wv, Department of Economics, UC San Diego.
    12. Giovanni Marin & Francesco Vona, 2017. "The Impact of Energy Prices on Employment and Environmental Performance: Evidence from French Manufacturing Establishments," Working Papers 2017.53, Fondazione Eni Enrico Mattei.
    13. Olivier Deschenes, 2014. "Environmental regulations and labor markets," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-22.
    14. Howlader, Aparna & Ando, Amy W., 2016. "Consequences of Protected Areas for Forest Extraction and Human Well-being: Evidence from Nepal," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236272, Agricultural and Applied Economics Association.
    15. Chemla, Gilles & Hennessy, Christopher, 2016. "The Paradox of Policy-Relevant RCTs and Natural Experiments," CEPR Discussion Papers 11361, C.E.P.R. Discussion Papers.
    16. Michele Raitano & Eleonora Romano & Pietro Zoppoli, 2016. "The sectorial intensity of production of renewable energy sources in Italy:measurement and effects on earnings," Working Papers 1, Department of the Treasury, Ministry of the Economy and of Finance.
    17. Shapiro, Joseph S. & Walker, Reed, 2015. "Why is Pollution from U.S. Manufacturing Declining? The Roles of Trade, Regulation, Productivity, and Preferences," IZA Discussion Papers 8789, Institute for the Study of Labor (IZA).
    18. repec:eee:wdevel:v:97:y:2017:i:c:p:79-101 is not listed on IDEAS
    19. Yazid Dissou & Qian Sun, 2013. "GHG Mitigation Policies and Employment: A CGE Analysis with Wage Rigidity and Application to Canada," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 53-66, August.
    20. Lang, Corey, 2015. "The dynamics of house price responsiveness and locational sorting: Evidence from air quality changes," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 71-82.
    21. Zhu, Junming & Ruth, Matthias, 2015. "Relocation or reallocation: Impacts of differentiated energy saving regulation on manufacturing industries in China," Ecological Economics, Elsevier, vol. 110(C), pages 119-133.
    22. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    23. repec:eee:jeeman:v:86:y:2017:i:c:p:1-7 is not listed on IDEAS
    24. repec:kap:regeco:v:51:y:2017:i:1:d:10.1007_s11149-016-9314-6 is not listed on IDEAS

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