IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The Effects of the Clean Air Act on Local Industrial Wages

  • Kim, Kijin

Since the beginning of the Clean Air Act, firms operating in regulated counties have faced with higher costs, which consequently had an impact on local labor markets. This paper investigates the effects of the air quality regulation on local manufacturing wages. Taking into account wage spillover explicitly into the model distinguishes this paper from existing studies in which spillover was ignored or was not a major focus. Using the 1982-2007 Census of Manufactures and the historical pollutant-specific nonattainment status for all counties, I construct the wage model with fixed effects partly based on the model specification in Greenstone (2002). I find the wage reduction in emitters induced by the regulations ranging from 2% to 10% depending on the pollutant, which in the 2005 dollar amount are equivalent to loss of roughly $800~$4,000 a year. I also find that the regulation effects are not uniform across industries: petroleum & coal, chemical & allied products and paper & allied products are influenced most among emitters. I find an evidence of the existence of spillover, but it is not so evident in the preferred fixed effects model.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/147489
Download Restriction: no

Paper provided by Midwest Graduate Student Conference on Regional and Applied Economics (CRAE), The Ohio State University, Department of Agricultural, Environmental and Development Economics in its series 6th Annual CRAE, April 5-6, 2013, Columbus, Ohio with number 147489.

as
in new window

Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:ags:crae13:147489
Contact details of provider: Postal:
2120 Fyffe Road, Columbus, Ohio 43210-1099

Web page: http://aede.osu.edu/crae

More information through EDIRC

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.:

as in new window
  1. Wang, Leonard F. S., 1990. "Unemployment and the backward incidence of pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 18(3), pages 292-298, May.
  2. Greenstone, Michael, 2004. "Did the Clean Air Act cause the remarkable decline in sulfur dioxide concentrations?," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 585-611, May.
  3. Harry H. Kelejian & Ingmar R. Prucha, 1997. "A Generalized Spatial Two Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," Electronic Working Papers 97-002, University of Maryland, Department of Economics, revised Aug 1997.
  4. Ostro, Bart D., 1983. "The effects of air pollution on work loss and morbidity," Journal of Environmental Economics and Management, Elsevier, vol. 10(4), pages 371-382, December.
  5. Vernon Henderson, 1995. "Effects of Air Quality Regulation," NBER Working Papers 5118, National Bureau of Economic Research, Inc.
  6. Kenneth Y. Chay & Michael Greenstone, 1998. "Does Air Quality Matter? Evidence from the Housing Market," NBER Working Papers 6826, National Bureau of Economic Research, Inc.
  7. Randy Becker, 2001. "Air Pollution Abatement Costs Under the Clean Air Act: Evidence from the PACE Survey," Working Papers 01-12, Center for Economic Studies, U.S. Census Bureau.
  8. Forster, Bruce A., 1984. "The backward incidence of pollution control: A dual approach," Journal of Environmental Economics and Management, Elsevier, vol. 11(1), pages 14-17, March.
  9. Vinod Mishra & Russell Smyth, 2011. "Environmental regulation and wages in China," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(8), pages 1075-1093, August.
  10. Baltagi, Badi H. & Liu, Long, 2011. "Instrumental variable estimation of a spatial autoregressive panel model with random effects," Economics Letters, Elsevier, vol. 111(2), pages 135-137, May.
  11. Göran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
  12. Randy A Becker & Vernon Henderson, 1999. "Costs of Air Quality Regulation," Working Papers 99-9, Center for Economic Studies, U.S. Census Bureau.
    • Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
  13. Hazilla, Michael & Kopp, Raymond J, 1990. "Social Cost of Environmental Quality Regulations: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 853-73, August.
  14. Hanna, Rema & Oliva, Paulina, 2015. "The effect of pollution on labor supply: Evidence from a natural experiment in Mexico City," Journal of Public Economics, Elsevier, vol. 122(C), pages 68-79.
  15. Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
  16. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1121-1167.
  17. John A. List & W. Warren McHone, 2000. "Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 177-190.
  18. J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
  19. 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.
  20. 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, vol. 128(4), pages 1787-1835.
  21. Drewes, Torben, 1987. "Regional Wage Spillover in Canada," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 224-31, May.
  22. Babcock, Linda & Engberg, John & Greenbaum, Robert, 2005. "Wage spillovers in public sector contract negotiations: the importance of social comparisons," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 395-416, July.
  23. John W. Budd, 1992. "The Determinants and Extent of UAW Pattern Bargaining," ILR Review, Cornell University, ILR School, vol. 45(3), pages 523-539, April.
  24. 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.
  25. 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 and Economics, University of Chicago Press, vol. 30(2), pages 239-64, October.
  26. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:crae13:147489. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.