Climate Policy and Labor Market Inequality [JOB MARKET PAPER]
This project 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. This effect is driven by a reduction in the hiring rate of this group. I do not find significant impacts on annual income among incumbent workers. The results show that carbon taxation has heterogeneous employment impacts, and that complementary policies might be needed to address labor market inequalities when implementing climate policy.
Climate Policy and Wage Adjustments
Following the previous literature on productivity shocks and wage adjustments, this project studies rent sharing between firms and workers exposed to exogenous economic shocks induced by climate policy.
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 estimating the future economic damages of climate change in the United States.