Social Costs of Jobs Lost Due to Environmental Regulations

Upjohn Institute Working Paper 13-193

64 Pages Posted: 30 Mar 2013

See all articles by Timothy Bartik

Timothy Bartik

W.E. Upjohn Institute for Employment Research

Date Written: March 28, 2013

Abstract

This paper estimates the social costs of job loss due to environmental regulation. Per job lost, potential social costs of job loss are high, plausibly over $100,000 in present value costs (2012 dollars) per permanently lost job. However, these social costs will typically be far less than the earnings associated with lost jobs, because labor markets and workers adjust, increased leisure has some value, and employers benefit from wage reductions. A plausible range for social costs is 8-32 percent of the associated earnings of the lost jobs. Social costs will be higher for older workers, high-wage jobs, and in high unemployment conditions. Under plausible estimates of job loss for most environmental regulations, the social costs of job loss will typically be less than 10 percent of other measured social costs of regulations. Therefore, adding in job loss is unlikely to tip many regulatory benefit-cost analyses.

Keywords: Benefit cost analysis, worker displacement, environmental regulation, social cost of labor

JEL Classification: D61, Q52, J68

Suggested Citation

Bartik, Timothy, Social Costs of Jobs Lost Due to Environmental Regulations (March 28, 2013). Upjohn Institute Working Paper 13-193, Available at SSRN: https://ssrn.com/abstract=2241065 or http://dx.doi.org/10.2139/ssrn.2241065

Timothy Bartik (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
75
Abstract Views
622
rank
348,740
PlumX Metrics