Jobs & Regulation Revisited

Blake Hudson called my attention to a nice post on this subject at ProPublica.  The post has links to two very interesting documents. The first is to a Census Bureau report showing that hardly any employers attribute layoffs to regulatory burdens.  The other is to a very careful study by Dick Morgenstern, a highly respected environmental economist, which found a possible small but positive effect of regulation on jobs:

We find that increased environmental spending generally does not cause a significant change in industry-level employment. Our average across all four industries is a net gain of 1.5 jobs per $1 million in additional environmental spending, with a standard error of 2.2 jobs—an insignificant effect. In the plastics and petroleum sectors, however, there are small but significantly positive effects: 6.9 and 2.2 jobs, respectively, per $1 million in additional expenditures. These effects can be linked to favorable factor shifts—environmental spending is more labor intensive than ordinary production—and relatively inelastic estimated demand.

I generally try to avoid accusing people of bad faith just because I disagree with them, but I am starting to wonder about the motives of the people who are promoting the “regulation kills jobs” message.

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