Social Costs of Jobs Lost Due to Environmental Regulations

Authors

Timothy J. Bartik, W.E. Upjohn Institute for Employment ResearchFollow

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-6238-8181

Publication Date

3-5-2013

Series

Upjohn Institute working paper ; 13-193

**Published Version**

In Review of Environmental Economics and Policy 9 (2): 179-197

DOI

10.17848/wp13-193

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.

Issue Date

March 5, 2013

Note

Upjohn project #34430

Sponsorship

Abt Associates

Subject Areas

LABOR MARKET ISSUES; Job security and unemployment dynamics; Dislocated workers