Climate Policy and Labor Market Inequality [JOB MARKET PAPER]
This paper investigates the effects of carbon taxation on labor market inequality in Sweden. Using matched employer-employee data from the Swedish registers for the years 2004-2018, I estimate the effects of a reform that increased the stringency of the tax for a subset of firms in the manufacturing sector. Using a difference-in-difference framework, I find that the reform significantly reduced emissions among treated firms. However, it also reduced the employment of workers without a high school degree. Further results suggest that this effect is driven by a reduction in the hiring rate of this group. In addition, I find that negative employment impacts are concentrated among emission-intensive firms, which face the largest cost increases when carbon tax rates rise. The results show that carbon taxation, while effective at reducing emissions, may have strongly heterogeneous employment impacts, and that complementary policies might be needed to address labor market inequalities when implementing climate policy.
Carbon Taxation, Career Paths and Wages
This project studies the effects of carbon taxation on individuals' career trajectories. I collect data on local labor markets in Sweden, and calculate the share of local employment exposed to the carbon tax reform described above. I develop a shift-share model that defines treatment using the local labor market exposure, to take into account local general equilibrium effects when analyzing the effects of increasing climate policy stringency. The empirical framework allows me to study the causal effects on individuals' job transitions, labor market participation, internal migration and labor income.
Climate Policy Shocks and Wage Adjustments
This project studies rent sharing between firms and workers exposed to exogenous shocks induced by climate policy. Following the previous literature on productivity shocks and wage adjustments, I exploit fluctuations in permit prices under the European Union Emissions Trading System (EU ETS) to study the effects on profit and wages among Swedish regulated firms. I use matching techniques, comparing regulated firms with unregulated firms with overlapping characteristics, in combination with time variation in permit prices, to identify the effects of shocks to climate policy stringency. I allow for different effects for net buyers versus net sellers of pollution permits, in order to investigate whether wage effects depend on the sign of the shock.
Karlsson, J. (2021). Temperature and Exports: Evidence from the United States. Environmental and Resource Economics, 80(2), 311-337.
This paper estimates the effect of exogenous short-term temperature changes on the economy of the United States, using high-resolution data on monthly exports which has not been previously exploited in the literature. The detailed disaggregation of U.S. export data into sectors enables a top-down estimation of the net effect of temperature, while also identifying potential mechanisms at the micro level. Using an econometric specification which allows high parametric flexibility, I find significantly negative effects of both high and low temperatures. The magnitude of the effects corresponds to an average reduction of annual U.S. exports by 0.20%, following a uniform 2°C temperature increase. Industry heterogeneity in the temperature effect suggests disparate mechanisms behind hot and cold days, which are important to take into account when forecasting the future economic damages of climate change in the United States.