Analyzing the Job Impacts of Regulation
Competing and extreme claims about the relationship between regulation and jobs pervade political debate in Washington, D.C. Some politicians claim that regulations kill significant numbers of jobs by increasing the cost of production, while others claim that regulations create jobs by creating new products and new opportunities for investment. Ultimately this heated debate provides little insight into what is, at root, an important empirical question in an era of bleak economic conditions: Do regulations actually kill jobs?
As the United States struggles with a high unemployment rate in the wake of the Great Recession, it is worth examining carefully the relationship between jobs and regulation, as well as possible policy responses to it. A recent panel discussion held at the Wharton School at the University of Pennsylvania sought to do just that.
The panel, organized around the recent publication of the book Does Regulation Kill Jobs?, showed how difficult it is to find any evidence to support claims that regulations systematically kill jobs. Political rhetoric notwithstanding, the book’s introductory chapter states that “the existing empirical research suggests that regulation does relatively little to reduce or increase overall jobs in the United States.”
In introducing the panel, Professor Cary Coglianese, Director of the Penn Program on Regulation and one of the co-editors of the new book, reviewed the existing research showing that regulation has, at most, relatively small aggregate effects on jobs. However, he suggested, more discrete employment effects do exist, they impose real burdens on individuals and their families, and their distribution across different states, sectors, or firms can vary. These differentially distributed effects give rise to concern among elected officials – all politics, after all, being local. Coglianese said the new book is premised on the idea that better analysis of employment effects would provide relevant information to decision makers.