NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

band Labor Demand: Evidence from the South Coast Air Basin

Eli Berman, Linda T. Bui

NBER Working Paper No. 6299
Issued in December 1997
NBER Program(s):   LS   PR

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.

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Document Object Identifier (DOI): 10.3386/w6299

Published: Berman, Eli and Linda T. M. Bui. "Environmental Regulation And Productivity: Evidence From Oil Refineries," Review of Economics and Statistics, 2001, v83(3,Aug), 498-510.

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