Assessing the Employment Impacts of Environmental and Natural Resource Policy

This paper provides an introductory guide for environmental andresource economists to methods of assessing the impact of environmentaland natural resource policy on employment. It examines five basicapproaches to evaluating the effect of a policy action on employment:1) supply and demand analysis of the affected sector; 2) partialequilibrium analysis of multiple markets; 3) fixed-price, generalequilibrium simulations (input-output (I-O) and social accounting matrix (SAM) multiplier models); 4) non-linear, general equilibriumsimulations (Computable General Equilibrium (CGE) models); and 5) econometric estimation of the adjustment process, particularly timeseries analysis. The basic modeling structure and data requirementsfor each of these approaches are described. Simple examples of theirapplication to evaluation of environmental and natural resourcepolicy are developed and the relative merits and applicability of each are discussed. Copyright Kluwer Academic Publishers 2002