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Do local energy prices and regulation affect the geographic concentration of employment?

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  • Kahn, Matthew E.
  • Mansur, Erin T.

Abstract

Manufacturing industries differ with respect to their energy intensity, labor-to-capital ratio and their pollution intensity. Across the United States, there is significant variation in electricity prices and labor and environmental regulation. This paper examines whether the basic logic of comparative advantage can explain the geographical clustering of U.S. manufacturing. We document that energy-intensive industries concentrate in low electricity price counties and labor-intensive industries avoid pro-union counties. We find mixed evidence that pollution-intensive industries locate in counties featuring relatively lax Clean Air Act regulation.

Suggested Citation

  • Kahn, Matthew E. & Mansur, Erin T., 2013. "Do local energy prices and regulation affect the geographic concentration of employment?," Journal of Public Economics, Elsevier, vol. 101(C), pages 105-114.
  • Handle: RePEc:eee:pubeco:v:101:y:2013:i:c:p:105-114
    DOI: 10.1016/j.jpubeco.2013.03.002
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    References listed on IDEAS

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