Unemployment and Regulatory Policy

Does Regulation Kill Jobs?, Cary Cognlianese et al., eds. (University of Pennsylvania Press, 2013)

University of Chicago Institute for Law & Economics Olin Research Paper No. 625

U of Chicago, Public Law Working Paper No. 412

22 Pages Posted: 19 Jan 2013 Last revised: 2 Dec 2016

Jonathan S. Masur

University of Chicago - Law School

Eric A. Posner

University of Chicago - Law School

Date Written: December 9, 2012

Abstract

In an earlier article, Regulation, Unemployment, and Cost-Benefit Analysis, we argued that regulatory agencies should incorporate the costs of unemployment into cost-benefit analyses of proposed regulations. We argued that alternatives to including unemployment costs in cost-benefit analysis — including feasibility analysis and job loss analysis — make little sense because they do not specify the threshold at which job loss is excessive and do not explicitly make tradeoffs between unemployment effects and social gains. Our paper was cited in a 2012 draft OMB report that sought advice from commentators as to whether cost-benefit analysis should incorporate unemployment costs and, if so, how it should do so. This chapter, prepared for a volume on the treatment of unemployment costs within cost-benefit analysis, builds and expands upon that earlier work. We first respond to some important questions and critiques that commentators have raised regarding our paper in the intervening years since we published it. We then discuss some broader issues raised by the debate about the incorporation of unemployment costs into cost-benefit analysis, including the role of “second-order” or remote costs and benefits and the treatment of the ex ante incentives of regulation.

Suggested Citation

Masur, Jonathan S. and Posner, Eric A., Unemployment and Regulatory Policy (December 9, 2012). University of Chicago Institute for Law & Economics Olin Research Paper No. 625; Does Regulation Kill Jobs?, Cary Cognlianese et al., eds. (University of Pennsylvania Press, 2013); University of Chicago Institute for Law & Economics Olin Research Paper No. 625; U of Chicago, Public Law Working Paper No. 412. Available at SSRN: https://ssrn.com/abstract=2198596 or http://dx.doi.org/10.2139/ssrn.2198596

Jonathan S. Masur (Contact Author)

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773.702.5188 (Phone)

HOME PAGE: http://www.law.uchicago.edu/faculty/masur/

Eric A. Posner

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-0425 (Phone)
773-702-0730 (Fax)

HOME PAGE: http://www.law.uchicago.edu/faculty/posner-e/

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