Local Labor Market Effects of Environmental Regulations: Evidence from Canada Wide Standards | Joseph Marchand

Joseph Marchand will be discussing the paper Local Labor Market Effects of Environmental Regulations: Evidence from Canada Wide Standards

Abstract

Environmental regulations have generated substantial benefits in terms of improvements
in air and water quality, and future regulations are expected to
be even more ambitious to confront challenges associated with transitioning
to renewable energy sources. Opponents, however, argue that these benefits
come at a high cost, particularly in terms of jobs and wages. This paper investigates
the impact of environmental regulations on labor market outcomes by
exploiting the largest environmental policy enacted in Canada, which aimed
to reduce air pollution. We exploit features of the policy that generated exogenous
variation in policy stringency both over time and across geographical
regions, as well as within geographical regions based on industry occupations,
within the framework of a difference-in-difference-in-differences framework to
estimate causal effects. In particular, we estimate the effect of an increase
in the stringency of regulations on employment, hours worked, and wages.
Finally, by coupling the estimates on labor market outcomes with estimates
on the effect of the policy on pollution concentrations, we can determine the
relative costs (in terms of unemployment and reduced wages) and benefits (in
terms of reduced air pollution).