In this study, we explore how spending on environmental protection impacts employment in different manufacturing sectors in Sweden between 2002 and 2021. Using detailed firm-level data, we apply a structural model that breaks down the overall employment effect into three components: cost effects, factor shifts, and demand changes. To improve accuracy, we use instrumental variables to address potential biases from factors like corporate social responsibility and self-regulation. Our findings show that, in most sectors, environmental protection spending does not have a significant impact on employment. However, the paper and pulp industry stands out, experiencing a noticeable decline in jobs due to these expenditures.
Link to paper: https://rdcu.be/eblte
