How Do Energy Prices, and Labor and Environmental Regulations Affect Local Manufacturing Employment Dynamics? A Regression Discontinuity Approach

Matthew Kahn and Erin Mansur

No 16538, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Manufacturing industries differ with respect to their energy intensity, labor-to-capital ratio and their pollution intensity. Across the United States, there is significant variation in electricity prices and labor and environmental regulation. This paper uses a regression discontinuity approach to examine whether the basic logic of comparative advantage can explain the geographical clustering of U.S. manufacturing. Using a unified empirical framework, we document that energy-intensive industries concentrate in low electricity price counties, labor-intensive industries avoid pro-union counties, and pollution-intensive industries locate in counties featuring relatively lax Clean Air Act regulation. We use our estimates to predict the likely jobs impacts of regional carbon mitigation efforts.

JEL-codes: L16 L38 L6 Q43 Q54 R11 (search for similar items in EconPapers)
Date: 2010-11
Note: EEE IO
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Citations: View citations in EconPapers (12)

Published as Do Local Energy Prices and Regulation Affect the Geographic Concentration of Employment? (Joint with Erin Mansur), Journal of Public Economics Volume 101, May 2013, Pages 105-114

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