DO ENVIRONMENTAL STANDARDS HARM MANUFACTURING EMPLOYMENT

A major issue in the debate about imposing environmental standards on polluting firms is the possibility of negative effects on employment. We examine the impact of environmental regulations on employment in an empirical analysis. Nonwegian data are used to study three manufactur ing sectors with high shares of units under strict environmental regul ations. We find that for two of these sectors, firms under strict envi ronmental regulations had a higher tendency to increase employment and a lower tendency to exit than firms under weak or no environmental re gulation. For the third sector, environmental regulations had no signi ficant impact on employment.