Distributional labor market effects of the United States Regional Greenhouse Gas Initiative

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.