Does Regulation Kill Jobs?

Does Regulation Kill Jobs?

Does Regulation Kill Jobs?

Does Regulation Kill Jobs?

Synopsis

As millions of Americans struggle to find work in the wake of the Great Recession, politicians from both parties look to regulation in search of an economic cure. Some claim that burdensome regulations undermine private sector competitiveness and job growth, while others argue that tough new regulations actually create jobs at the same time that they provide other benefits. "Does Regulation Kill Jobs?" reveals the complex reality of regulation that supports neither partisan view. Leading legal scholars, economists, political scientists, and policy analysts show that individual regulations can at times induce employment shifts across firms, sectors, and regions--but regulation overall is neither a prime job killer nor a key job creator. The challenge for policymakers is to look carefully at individual regulatory proposals to discern any job shifting they may cause and then to make regulatory decisions sensitive to anticipated employment effects. Drawing on their analyses, contributors recommend methods for obtaining better estimates of job impacts when evaluating regulatory costs and benefits. They also assess possible ways of reforming regulatory institutions and processes to take better account of employment effects in policy decision-making. "Does Regulation Kills Jobs?" tackles what has become a heated partisan issue with exactly the kind of careful analysis policymakers need in order to make better policy decisions, providing insights that will benefit both politicians and citizens who seek economic growth as well as the protection of public health and safety, financial security, environmental sustainability, and other civic goals. Contributors: Matthew D. Adler, Joseph E. Aldy, Christopher Carrigan, Cary Coglianese, E. Donald Elliott, Rolf Fare, Ann Ferris, Adam M. Finkel, Wayne B. Gray, Shawna Grosskopf, Michael A. Livermore, Brian F. Mannix, Jonathan S. Masur, Al McGartland, Richard Morgenstern, Carl A. Pasurka, Jr., William A. Pizer, Eric A. Posner, Lisa A. Robinson, Jason A. Schwartz, Ronald J. Shadbegian, Stuart Shapiro.

Excerpt

Are regulations job killers or job creators? This question has dominated much public debate in the United States during the past several years as the nation has suffered sustained high levels of unemployment. Some politicians espouse the view that regulations are job killers, while others claim that regulations either have little negative effect or actually stimulate the creation of new industries and jobs. Although the debate over jobs and regulation often divides along party lines, politicians on both sides of the aisle share a common desire to improve economic conditions and lessen the hardship that unemployment imposes on individuals and their families. This book responds to that common desire by bringing together the work of leading scholars and practitioners to understand better how regulation affects employment and what regulatory agencies might do to improve their analysis of these employment impacts.

Despite the obvious reasons for wanting to understand better whether regulation helps or hurts employment, neither regulatory analysts nor academic researchers have yet to develop the kind of evidentiary foundation needed to provide solid answers. Partly this is because the empirical relationship between regulation and employment is harder to untangle than it might seem at first glance. Intuitively it might seem obvious that regulation adversely affects employment. When regulation increases the cost of doing business, it drives up the cost of products and services, reducing demand and thereby shrinking employers’ need for workers and the capacity to retain them. But just as intuitively, it might seem obvious that regulation can promote jobs. After all, one of the ways regulation increases the cost of doing business is by increasing the demand for goods and services needed to comply with the law, thus creating additional demand for labor associated with installing and operating required equipment and implementing mandated protocols. Of course, it is also highly plausible that both intuitions have validity and that the same regulations that increase jobs for some individuals decrease them for others.

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