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The Economic and Environmental Effects of a Green Employer of Last Resort: A Sectoral Multiplier Analysis for the United States

Author

Listed:
  • Giuliano Toshiro Yajima
  • Nikolaos Rodousakis
  • George Soklis

Abstract

We assess the sectoral impact of the implementation of a "green" employer of last resort (ELR) program in the US, based on an environmental modification of an extended Kurz's (1985) multiplier framework and data from OECD Input-Output tables. We use these multipliers to estimate the impact of an "optimal" ELR, designed to maximize the impact on both output and employment while minimizing both imports and carbon emissions. We then test several alternative policy scenarios based upon different compositions of US government expenditure. We provide evidence that (1) investing in the optimal sectors in terms of output, employment, Co2, and import multipliers does not always deliver optimal results in the aggregate; (2) ecological sustainability for the US economy also fosters import sustainability; (3) a rebounding effect in Co2 emissions may be tamed if the ELR satisfies the abovementioned optimality condition, though this undermines its success in terms of output and employment.

Suggested Citation

  • Giuliano Toshiro Yajima & Nikolaos Rodousakis & George Soklis, 2023. "The Economic and Environmental Effects of a Green Employer of Last Resort: A Sectoral Multiplier Analysis for the United States," Economics Working Paper Archive wp_1013, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_1013
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    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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