TAILIEUCHUNG - Jobs versus the Environment: An Industry-level Perspective

There was a time of optimism and progress in the 1960s, when there was greater hope for a braver new world, and for progressive international ideas. Colonies blessed with natural resources were becoming nations. The locals of co-operation and sharing seemed to be seriously pursued. Paradoxically, the 1970s slid slowly into moods of reaction and isolation while at the same time a series of UN conferences offered hope for greater co-operation on major issues. The 1972 UN Conference on the Human Environment brought the industrialized and developing nations together to delineate the "rights" of the human family to a healthy and productive environment. A string of such. | Jobs versus the Environment An Industry-level Perspective Richard D. Morgenstern William A. Pizer and Jhih-Shyang Shih December 1998 Revised November 1999 Revised June 2000 Discussion Paper 99-01-REV RESOURCES FOR THE FUTURE Resources for the Future 1616 P Street NW Washington . 20036 Telephone 202-328-5000 Fax 202-939-3460 Internet http 2000 Resources for the Future. All rights reserved. No portion of this paper may be reproduced without permission of the authors. Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment. Jobs versus the Environment An Industry-level Perspective Richard D. Morgenstern William A. Pizer and Jhih-Shyang Shih Abstract The possibility that workers could be adversely affected by environmental policies imposed on heavily regulated industries has led to claims of a jobs versus the environment trade-off by both business and labor leaders. The present research examines this claim at the industry level for four heavily polluting industries pulp and paper mills plastic manufacturers petroleum refiners and iron and steel mills. By focusing on labor effects across an entire industry we construct a measure relevant to the concerns of key stakeholders such as labor unions and trade groups. We decompose the link between environmental regulation and employment into three distinct components factor shifts to more or less labor intensity changes in total expenditures and changes in the quantity of output demanded. We use detailed plant-level data to estimate the key parameters describing factor shifts and changes in total expenditures. We then use aggregate time-series data on industry supply shocks and output responses to estimate the demand effect. We find that increased environmental spending generally does not cause a significant change in industry-level employment. Our average across all four .

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