Conference Agenda

Effects on jobs carry great weight in political debates, especially for environmental policy. Previous research on the impact of environmental policy on jobs, such as Hafstead and Williams (2018) and Hafstead, Williams, and Chen (2018), finds that environmental policy reallocates workers across industries with little to no net job loss. But while those papers looked at changes in the number of jobs in different industries, they didn’t directly address the distribution of transitional labor market dynamics across workers. This paper extends those papers by classifying workers by their industry at the time of policy implementation (“initial industry”) and analyzing how the change in unemployment rates varies by initial industry over time. When we track workers by their industry at time of policy implementation, we find significant differences in short-run labor-market effects (as measured by changes in unemployment rates, earnings, and unemployment durations) across a range of policies aimed at reducing energy-related carbon dioxide emissions. Unsurprisingly, we find that large negative impacts are concentrated among workers initially employed in a few carbon-intensive industries. Finally, we show that policy pre-announcement and policy phase-ins can meaningfully reduce the short-run negative employment impacts both at the aggregate level and for the most affected groups of workers.