Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246854 
Year of Publication: 
2021
Series/Report no.: 
Economics Working Paper Series No. 21/364
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
This paper adds a fresh angle to the on-going debate on the potential negative employment effect of environmental policy by bringing to the fore a key factor that directly regulates its magnitude: the elasticity of substitution between labor and energy. Using firm-level data from the French manufacturing sector, we provide rigorous micro estimates of this parameter that point to strong complementarity between labor and energy. We then provide clear evidence for the empirical, as well as theoretical, relevance of the elasticity of substitution in understanding the effect of environmental policies on employment.
Subjects: 
market-based regulation
employment
elasticity of substitution
JEL: 
Q40
Q54
Q55
O33
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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