Optimal environmental policy aims at equalizing benefits and costs of improving environmental quality. While the benefits generally accrue in the form of increased health, worker productivity, quality of life, and amenity values, the costs that environmental regulations might impose on the labor market are mostly borne through impacts on production, employment, and labor compensation. The articles illustrate how successful policy development requires information on the connection between environmental regulations, labor markets, and industrial activity.
Air pollution, educational achievements, and human capital formation
Exposure to elevated levels of air pollution adversely affects educational outcomesSefi Roth, August 2017The link between air pollution and human health is well-documented in the epidemiology and economic literature. Recently, an increasing body of research has shown that air pollution—even in relatively low doses—also affects educational outcomes across several distinct age groups and varying lengths of exposure. This implies that a narrow focus on traditional health outcomes, such as morbidity and mortality, may understate the true benefit of reducing pollution, as air pollution also affects scholastic achievement and human capital formation.MoreLess
Employment effects of green energy policies Updated
Does a switch in energy policy toward more renewable sources create or destroy jobs in an industrial country?Nico Pestel, December 2019Many industrial countries are pursuing so-called green energy policies, which typically imply the replacement of conventional fossil fuel power plants with renewable sources. Such a policy shift may affect employment in different ways. On the one hand, it could create new and additional “green jobs” in the renewables sector; on the other hand, it could crowd out employment in other sectors. An additional consideration is the potential increase in energy prices, which has the potential to stifle labor demand in energy-intensive sectors and reduce the purchasing power of private households.MoreLess
Air pollution and worker productivity Updated
Higher levels of air pollution reduce worker productivity, even when air quality is generally lowMatthew NeidellNico Pestel, February 2023Environmental regulations are typically considered to be a drag on the economy. However, improved environmental quality may actually enhance productivity by creating a healthier workforce. Evidence suggests that improvements in air quality lead to improvements in worker productivity at the micro level across a range of sectors, including agriculture, manufacturing, and the service sectors, as well as at more aggregate macro levels. These effects also arise at levels of air quality that are below pollution thresholds in countries with the highest levels of environmental regulation. The findings suggest a new approach for understanding the consequences of environmental regulations.MoreLess
Do responsible employers attract responsible employees?
The cost of a firm’s commitment to CSR may be offset by its appeal to motivated employees who work harder for lower wagesKarine Nyborg, May 2014Survey and register data indicate that many employees prefer a socially responsible employer and will accept a lower wage to achieve this. Laboratory experiments support the hypothesis that socially responsible groups are more productive than others, partly because they attract cooperative types, partly because initial cooperation is reinforced by group dynamics. Overall, the findings indicate corporate social responsibility may have cost advantages for firms.MoreLess
Climate change, natural disasters, and migration
The relationship between migration and natural events is not straightforward and presents many complexitiesLinguère Mously Mbaye, March 2017The relationship between climatic shocks, natural disasters, and migration has received increasing attention in recent years and is quite controversial. One view suggests that climate change and its associated natural disasters increase migration. An alternative view suggests that climate change may only have marginal effects on migration. Knowing whether climate change and natural disasters lead to more migration is crucial to better understand the different channels of transmission between climatic shocks and migration and to formulate evidence-based policy recommendations for the efficient management of the consequences of disasters.MoreLess
The impact of energy booms on local workers
Energy booms create widespread short-term benefits for local workers, but appropriate policy requires consideration of a broad array of factorsGrant D. Jacobsen, November 2019One of the primary considerations in policy debates related to energy development is the projected effect of resource extraction on local workers. These debates have become more common in recent years because technological progress has enabled the extraction of unconventional energy sources, such as shale gas and oil, spurring rapid development in many areas. It is thus crucial to discuss the empirical evidence on the effect of “energy booms” on local workers, considering both the potential short- and long-term impacts, and the implications of this evidence for public policy.MoreLess