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Working Paper: How Did Air Quality Standards Affect Employment at U.S. Power Plants? The Importance of Stringency, Geography, and Timing

Paper Number: 2015-01

Document Date: 5/2015

Author(s): Glenn Sheriff, Ann E. Ferris, and Ronald J. Shadbegian

Subject Area(s): Air Pollution; Economic Impacts

Keywords: air pollution; electricity; employment; regulation

Abstract: Geographical differences in U.S. Clean Air Act requirements are often used to identify environmental regulatory impacts. The standard approach abstracts from aspects of the law affecting which areas are regulated, how strictly they are regulated, and when regulatory changes occur. We find that omitting these factors can bias results by contaminating the control group, leading to under-estimation of historical employment impacts and overestimation of projected impacts from tightening regulations. Results indicate that 1990 changes to ozone nonattainment provisions reduced power plant employment without significantly affecting generation, suggesting that installation of pollution controls contributed to labor-saving technical change at affected sources.

This paper is part of the Environmental Economics Working Paper Series.

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