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The Cost of Regulation: OSHA, EPA and the Productivity Slowdown
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The Cost of Regulation: OSHA, EPA and the Productivity Slowdown
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Journal Article
The Cost of Regulation: OSHA, EPA and the Productivity Slowdown
1987
Overview
Regression analysis is employed to examine the impact on productivity growth of government regulation, specifically worker health and safety regulation by the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA). The analysis concentrates on total factor productivity (TFP) measures of productivity growth, which consider the contribution of all productive inputs to output growth. Data are obtained for 450 US manufacturing industries for the period 1958-1978 from the Annual Survey of Manufacturers and the Census of Manufacturers. The results show that OSHA and EPA regulation reduced productivity growth in the average manufacturing industry by .44 percentage points per year, over 30% of the slowdown on the 1970s. The effect of OSHA is found to be quite strong, while that of the EPA is comparatively weak. There also is evidence that pollution-abatement spending only affected the measurement of productivity growth, with no real effect on productivity inputs used in production.
