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Environmental Regulation and Labor Demand: The Northern Spotted Owl

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  • Ferris, Ann E.

Abstract

Environmental regulation can impact local labor markets, potentially reducing incomes and employment and inducing reallocation across sectors. The labor market consequences of environmental regulation are difficult to isolate because regulations frequently apply to large areas, such as the entire United States, and researchers cannot directly observe the counterfactual, in the absence of regulation. I claim that protection of the northern spotted owl in the Pacific Northwest in the 1990s led to an exogenous decline in labor demand in that region. I use this policy change to identify the local and regional impacts of endangered species regulation on employment and incomes in the timber industry. I estimate the local labor market impact of owl protection by comparing counties in the region with and without owl-protected areas. Depending on the choice of control areas and the inclusion of additional control factors, northern spotted owl protection plausibly led to a small loss of incomes and employment in the region

Suggested Citation

  • Ferris, Ann E., 2017. "Environmental Regulation and Labor Demand: The Northern Spotted Owl," National Center for Environmental Economics-NCEE Working Papers 280940, United States Environmental Protection Agency (EPA).
  • Handle: RePEc:ags:nceewp:280940
    DOI: 10.22004/ag.econ.280940
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    References listed on IDEAS

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    1. Daigneault, Adam J. & Sohngen, Brent & Kim, Sei Jin, 2016. "Estimating welfare effects from supply shocks with dynamic factor demand models," Forest Policy and Economics, Elsevier, vol. 73(C), pages 41-51.
    2. Peter Berck & Sandra Hoffmann, 2002. "Assessing the Employment Impacts of Environmental and Natural Resource Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 133-156, June.
    3. Daigneault, Adam & Sohngen, Brent, 2008. "Estimating Welfare Effects from Supply Shocks with Dynamic Factor Demand Models," National Center for Environmental Economics-NCEE Working Papers 280864, United States Environmental Protection Agency (EPA).
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