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.
Dan Farber has written and taught on environmental and constitutional law as well as about contracts, jurisprudence and legislation. Currently at Berkeley Law, he has al…READ more