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Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency
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Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency
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Journal Article
Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency
1987
Overview
It is argued that, if the competitive advantage gained through the indirect effects of Occupational Safety & Health Administration (OSHA) and Environmental Protection Agency (EPA) regulations is sufficiently large, it can more than offset any direct costs, producing a net benefit for the regulated firm and its workers. It is documented empirically that the indirect effects produced by compliance and enforcement asymetries migrate the direct costs of regulation for many firms. In particular, large firms in the Frost Belt gain wealth at the expense of small firms in the Sun Belt. The actual effect of OSHA and EPA regulation on profits and wages is computed by letting the net import ratio, the percentage of employment in large establishments, and the Frost Belt employment share each take on, in turn, their minimum, mean, or maximum values, while the other 2 variables are set equal to their means. It is shown that predators do indeed benefit from regulation.
Publisher
The University of Chicago Press,Univ. of Chicago Press,University of Chicago Law School
