Does Environmental Regulation Effect Employment and Wages in the US Manufacturing?
Ronald J. Shadbegian and Naa Akofio-Sowah, University of Massachusetts at Dartmouth The late 1960s and early 1970s saw increased federal government regulation in a number of areas via the creation of the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) to enhance worker safety and environmental quality respectively. It is generally accepted that environmental regulation is more costly, with the EPAs budget representing nearly 1/3 of the total regulatory budget (Warren and Chilton, 1990) and the U.S. manufacturing sector reporting $23 billion dollars in pollution abatement operating costs and capital expenditures in 1990. There have been several studies that have examined the impact of environmental regulation on various aspects of U.S. manufacturing. Some use estimates of compliance costs to calculate productivity effects (e.g. the ‘growth accounting’ work of Denison (1979)), which tend to find a small impact on productivity since compl
