Tuesday, April 23, 2013

IZA's New Environment and Employment Group

I've joined the IZA as a Research Fellow in its new Environment and Employment program.   Over the years, I have written several papers examining how environmental regulation affects the location of industrial activity in the United States.  Here is my paper from 1997 and here is a paper (joint with Erin Mansur) that will soon be published in the Journal of Public Economics.

What are the "big questions" in this subfield?

1.  In the developing world, as environmental regulations are tightened in the wealthiest cities, does this accelerate the decentralization of industrial employment to 2nd and 3rd tier cities?

2.  In 2013, are dirty industries still capital intensive so that the factor endowment hypothesis can overwhelm the pollution haven effect so that richer capital intensive nations retain dirty industry?  (so retesting the Copeland and Taylor core hypothesis).

3.  Building on Josh Zivin's recent work, how does external environmental conditions affect worker productivity?  Does urbanization mitigate this effect since people are working inside?

4.  As states such as California enact carbon mitigation legislation (AB32), how many jobs does this create (i.e green jobs) and how jobs does this legislation repel?  How can such counter-factuals be credibly constructed?

5.  Who bears the incidence of environmental regulation?  Which industries raise consumer prices versus firing workers when regulation increases?

The one thing I'm puzzled about here is methodology. In this age of the "field experiment", how can this methodology be used to study the relationship between "environment and employment".  One possibility is randomized audits of firms as a pollution deterrence strategy but I'm having trouble thinking of other examples.