Conventional wisdom implies economic growth and environmental quality are i
ncompatible policy objectives. Recent empirical evidence, however, suggests
stringency of environmental regulations are only weakly (or not at all) as
sociated with decreased manufacturing activity. This paper uses more recent
(1982-1994) state-level panel data to rest if environmental regulations af
fect manufacturing employment. Estimation results from our three-stage samp
le selection panel data model suggest that state environmental regulations
adversely affect job growth in three of the four industries analyzed.