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Environmental Regulations and the Welfare Effects of Job Layoffs in the United States: A Spatial Approach

Author

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  • Nicolai V. Kuminoff
  • Todd Schoellman
  • Christopher Timmins

Abstract

This article develops welfare-consistent measures of the employment effects of environmental regulation. Our analysis is based on a microeconomic model of how households with heterogeneous preferences and skills decide where to live and work. We use the model to examine how job loss and unemployment would affect workers in Northern California. Our stylized simulations produce earnings losses that are consistent with empirical evidence. They also produce two new insights. First, we find that earnings losses are sensitive to business cycle conditions. Second, we find that earnings losses may substantially understate welfare losses once we account for the fact that workers may have to commute further or live in a less desirable community after losing a job.

Suggested Citation

  • Nicolai V. Kuminoff & Todd Schoellman & Christopher Timmins, 2015. "Environmental Regulations and the Welfare Effects of Job Layoffs in the United States: A Spatial Approach," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 198-218.
    • Handle: RePEc:oup:renvpo:v:9:y:2015:i:2:p:198-218.
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    File URL: http://hdl.handle.net/10.1093/reep/rev006
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    References listed on IDEAS

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    1. Robert E. Hall, 2006. "Job Loss, Job Finding and Unemployment in the US Economy over the Past Fifty Years," NBER Chapters, in: NBER Macroeconomics Annual 2005, Volume 20, pages 101-166, National Bureau of Economic Research, Inc.
    2. Richard Rogerson, 2015. "A Macroeconomic Perspective on Evaluating Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 219-238.
    3. Patrick Bayer & Robert McMillan & Alvin Murphy & Christopher Timmins, 2011. "A Dynamic Model of Demand for Houses and Neighborhoods," NBER Working Papers 17250, National Bureau of Economic Research, Inc.
    4. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, vol. 95(1), pages 25-49, March.
    5. Timothy J. Bartik, 2015. "The Social Value of Job Loss and Its Effect on the Costs of U.S. Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 179-197.
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    Cited by:

    1. Francesco Vona & Giovanni Marin & Davide Consoli & David Popp, 2018. "Environmental Regulation and Green Skills: An Empirical Exploration," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(4), pages 713-753.
    2. Heutel, Garth & Zhang, Xin, 2021. "Efficiency wages, unemployment, and environmental policy," Energy Economics, Elsevier, vol. 104(C).
    3. Marten, Alex L. & Schreiber, Andrew & Wolverton, Ann, 2024. "Occupational Affiliation and the Incidence of Environmental Regulation," National Center for Environmental Economics-NCEE Working Papers 348909, United States Environmental Protection Agency (EPA).
    4. V. Kerry Smith, 2015. "Should Benefit–Cost Methods Take Account of High Unemployment? Symposium Introduction," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 165-178.
    5. Ferris, Ann & Garbaccio, Richard & Marten, Alex & Wolverton, Ann, 2017. "The Impacts of Environmental Regulation on the U.S. Economy," National Center for Environmental Economics-NCEE Working Papers 280936, United States Environmental Protection Agency (EPA).
    6. Richard Rogerson, 2015. "A Macroeconomic Perspective on Evaluating Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 219-238.
    7. U.S. Environmental Protection Agency (EPA), 2024. "Technical Guidance for Assessment Environmental Justice in Regulatory Analysis," Environmental Economics Guidance Documents 348895, United States Environmental Protection Agency (EPA).
    8. repec:spo:wpmain:info:hdl:2441/1fkb59dcsg9alqqq6qv18jj5us is not listed on IDEAS
    9. Timothy J. Bartik, 2015. "The Social Value of Job Loss and Its Effect on the Costs of U.S. Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 9(2), pages 179-197.

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