Paper Number: 2008-10

Document Date: 10/2008

Author(s): Randy A. Becker and Ronald J. Shadbegian

Subject Area(s): Environmental Policy; Economic Impacts

Keywords: green industry; environmental products; employment; wages; exports; productivity; growth

Abstract: The “green industry” is often noted in discussions of the costs and benefits of environmental policy, and it has been characterized as a unique industry with substantial potential for employment growth, well-paying jobs, and export opportunities. In this paper, we examine the characteristics and recent economic performance of the green industry, using establishment-level data on environmental products manufacturers (EPMs) from the 1995 Survey of Environmental Products and Services, together with data from the Annual Survey of Manufactures and various Census of Manufactures. Results suggest that there are some differences between EPMs and their non-EPM counterparts in the same industry, in terms of employment, employee compensation, exports, and productivity. However, we do not find any evidence that EPMs performed any better than otherwise similar plants, in terms of survival, employment growth, wage growth, and export growth. Our findings offer a more complex and nuanced portrayal of the green industry than is typical, and we suggest that this industry may not be as exceptional as is sometimes maintained.

This paper is part of the Environmental Economics Working Paper Series.

• The Green Industry: An Examination of Environmental Products Manufacturing (PDF)(43 pp, 735 K, 10/2008)