Environmental Regulation and Labor Demand: What Does the Evidence Tell Us?

Wayne Gray, Ron Shadbegian and Ann Wolverton
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Ann Wolverton: National Center for Environmental Economics, US Environmental Protection Agency, Washington, DC, USA

Annual Review of Resource Economics, 2023, vol. 15, issue 1, 177-197

Abstract: Understanding the potential effect of environmental regulation on employment is of broad interest to key stakeholders. Concerns encompass both short- and longer-term effects on workers within the regulated sector, affected communities that already suffer from a lack of employment opportunities, and net employment in the overall economy. We begin our review by presenting a neoclassical microeconomic framework demonstrating how environmental regulations might affect labor demand. We then summarize the main empirical findings from the literature, including sector-specific partial equilibrium estimates and general equilibrium approaches to identifying the employment impacts of regulations. We also briefly describe the literature on how environmental regulations affect labor supply. Finally, we discuss remaining research gaps.

Keywords: employment; environmental regulation; labor demand (search for similar items in EconPapers)
JEL-codes: Q52 Q58 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1146/annurev-resource-101422-115834

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