EconPapers    
Economics at your fingertips  
 

Complementarity between labor and energy: A firm-level analysis

Lucas Bretschger and Ara Jo

Journal of Environmental Economics and Management, 2024, vol. 124, issue C

Abstract: This paper extends the literature on the potential negative employment effects of environmental policy by bringing to the fore a key factor that directly regulates its magnitude: the elasticity of substitution between labor and energy. Using firm-level data from the French manufacturing sector and addressing endogeneity concerns, we provide empirical estimates that point to strong complementarity between labor and energy. We then investigate the empirical relevance of the elasticity of substitution in studying firms’ response to changing energy prices. Our findings suggest that the negative employment effects of rising energy prices are largely driven by firms with limited substitution capacity.

Keywords: Market-based regulation; Employment; Elasticity of substitution (search for similar items in EconPapers)
JEL-codes: O33 Q40 Q54 Q55 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0095069624000081
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Complementarity between labor and energy: A firm-?level analysis (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:124:y:2024:i:c:s0095069624000081

DOI: 10.1016/j.jeem.2024.102934

Access Statistics for this article

Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-23
Handle: RePEc:eee:jeeman:v:124:y:2024:i:c:s0095069624000081