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band Labor Demand: Evidence from the South Coast Air Basin

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  • Eli Berman
  • Linda T. Bui

Abstract

The devolved nature of environmental regulation provides an excellent opportunity for" estimating the effects of regulation on employment, by generating rich variation in regulation" across regions and over time. We exploit this variation using direct measures of regulation and" plant data. We estimate the employment effects of an unprecedented increase in air quality" regulation in the Los Angeles region, using unregulated plants in other regions years for comparison. While environmental regulation is generally thought to reduce" employment, economic theory is ambiguous on this point, since pollution abatement technologies" may be labor using. We find that air quality regulation induced very expensive investments in" abatement capital for individual plants, especially for oil refineries. Despite these high costs we" find no evidence that environmental regulation decreased labor demand induced plant exit and dissuaded plant entry. If anything, air quality regulation probably inc-" reased employment slightly.

Suggested Citation

  • Eli Berman & Linda T. Bui, 1997. "band Labor Demand: Evidence from the South Coast Air Basin," NBER Working Papers 6299, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:6299
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    References listed on IDEAS

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    1. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Shu Kedong & Lu Yueyu & Yu Ziyan & Kuai Peng & Zhang Shu’an, 2021. "Influences of environmental regulations on skill premium: mediating effect of industrial structure optimization," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 245-273, April.
    2. Morgenstern, Richard D. & Pizer, William A. & Shih, Jhih-Shyang, 2002. "Jobs Versus the Environment: An Industry-Level Perspective," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 412-436, May.
    3. Becker, Randy A. & Pasurka, Carl & Shadbegian, Ronald J., 2013. "Do environmental regulations disproportionately affect small businesses? Evidence from the Pollution Abatement Costs and Expenditures survey," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 523-538.
    4. Arik Levinson, 2001. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 131-158, National Bureau of Economic Research, Inc.
    5. Michael Greenstone, 2001. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 & 1977 Clean Air Act Amendments and the Census of Manufactures," NBER Working Papers 8484, National Bureau of Economic Research, Inc.

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    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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