This study conducts an event study to evaluate the impact of the Regional Greenhouse Gas Initiative (RGGI) on the United States’ labor market outcomes. Using an event-study design and data from the Current Population Survey (2000–2020), we compare labor market outcomes between RGGI and non-RGGI states. Results show a significant and immediate decline in annual wage income for unskilled workers in energy-intensive sectors following RGGI implementation, with the negative effect growing in magnitude and peaking at approximately a 7% reduction four years post-reform. For skilled workers, the wage effects are less consistent and generally statistically insignificant, though negative point estimates are observed in some post-treatment years. We find no significant effects on weeks worked, unemployment probability, or outcomes for workers in non-energy-intensive sectors.
Almutawa et al. (Sun,) studied this question.