March 19, 2013

The Employment Costs of Regulation

Editor’s Note: The Mercatus Working Paper, “The Employment Costs of Regulation” is attached here.  Below is the Abstract.

From: Mercatus Center/George Mason University

Keith Hall


Concern over the impact of regulations on jobs and job growth is not new, but the efforts of federal agencies have never focused effectively on labor markets effects. Part of the reason is that the empirically most important impacts on labor markets—the macroeconomic effects and the dynamic effects—are very hard to forecast. In addition, it is generally meaningless to include a simple job count as part of the analysis. Unfortunately, agencies could, but have chosen not to, estimate the likely economic cost of job displacement. This decision is not based on empirical evidence that job displacement is costless. In fact, the evidence is quite strong that job displacement of any type is very costly for individuals, families, and communities. This intentional dismissal of the cost of job displacement remains a real shortcoming of agency efforts to promote only those regulations where the benefits are worth their costs.

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