Presentation from OECD Expert Workshop on Environmental Policies: Social and Economic Outcomes 23-24 June 2022

1. THE EFFECT OF ENERGY PRICES AND ENVIRONMENTAL
POLICY STRINGENCY ON MANUFACTURING
EMPLOYMENT IN OECD COUNTRIES
24 May 2022, workshop
Sector- and firm-level evidence
Balazs Stadler, balazs.stadler@oecd.org
with Antoine Dechezleprêtre and Daniel Nachtigall

2. 2
Introduction

3. • Energy prices and carbon pricing
– Deschenes (2011); Kahn and Mansur (2013); Yamazaki (2017); Hille and
Möbius (2019)
– EU ETS: Anger and Oberndorfer (2008); Martin, Muûls and Wagner
(2015); Dechezleprêtre et al (2018); Dechezleprêtre et al (2019)
• Other regulation
– Berman and Bui (2001); Morgenstern et al (2002); Cole and Elliott (2007);
Belova et al (2013)
– CAA: Greenstone (2001); Walker (2013); Shadbegian and Wolverton
(2014)
3
Previous empirical literature

4. 4
Added value / this paper / 3 different approaches
Environmental policies Manufacturing sector
• Energy prices
• Environmental policy
• Metal manufacturing
• Chemical manufact.
• Food manufacturing
• Others…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm entry
Firm exit

5. ln 𝐿𝑐𝑠𝑡 = 𝛽𝑝 ln 𝑝𝑐𝑠𝑡−1 + 𝛽𝐸𝑃𝑆 ln 𝐸𝑃𝑆𝑐𝑡−1 +
+𝛽𝑤𝑤𝑐𝑠𝑡−1 + 𝛽𝐾 ln 𝐾𝑐𝑠𝑡−1 + 𝛽𝑉 ln
𝑉𝑐𝑠𝑡−1
𝐿𝑐𝑠𝑡−1
+
+fixed effects + 𝜀𝑐𝑠𝑡
5
Methodology: general

6. 6
Data
Variable Sector-level source Firm-level source
Energy prices Sato et al (2019) Sato et al (2019)
Environmental Policy
Stringency
OECD (2019) OECD (2019)
Employment WIOD ORBIS
Labour productivity WIOD ORBIS
Wage WIOD WIOD
Capital WIOD ORBIS
Value Added WIOD ORBIS
Firm entry/exit: OECD Business Demographics
2000-2014
Almost all OECD countries

7. 7
Sector-level estimation
An example
Energy prices:
15 000 lost jobs per year
Robotisation:
21 000 - 39 000 lost jobs
per year
(Acemoglu and Restrepo, 2017)
Trade openness to China:
78 000 lost jobs per year
(Caliendo, Dvorkin and Parro, 2019)

8. 8
Firm-level estimation

9. 9
Entry/exit estimation

10. 10
Interpretation
Environmental policy Manufacturing sector
• Energy prices
• Environmental policy
• Metal manufacturing
• Chemical manufact.
• Food manufacturing
• Others…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm entry
Firm exit

11. 11
Interpretation
Environmental policy Manufacturing sector
• Energy prices
• Environmental policy
• Metal manufacturing
• Chemical manufact.
• Food manufacturing
• Others…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm 1 Firm 2…
Firm entry
Firm exit

12. • Small effects
– Especially in pollution intensive sectors
• Local costs
• Complementary labour market policies
12
Conclusions

13. THANK YOU FOR YOUR KIND
ATTENTION!
balazs.stadler@oecd.org
https://www.oecd.org/greengrowth/