Labor Market Impacts of Deforestation Caused by Invasive Species Spread
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Labor Market Impacts of Deforestation Caused by Invasive Species Spread Benjamin A. Jones1 Accepted: 9 July 2020 © Springer Nature B.V. 2020
Abstract Loss of tree cover caused by forest-attacking invasive species negatively affects environmental quality by impacting air quality, temperature, and recreational opportunities. Prior work has shown causal associations between these environmental quality metrics and labor market outcomes, however, never before due to invasive species spread. To address this gap, this paper explores the labor market effects of invasive species-induced deforestation using quasi-random detections of the invasive emerald ash borer (EAB) as a natural experiment. Using multiple sources of labor market data, it is shown that wage earnings are lower by an average of 1% in the years after EAB detection. Strongest impacts are observed in the manufacturing (4.3% decline) and accommodation and food service (4.2% decline) industries. Additional impacts are observed on the number of Social Security claimants and the number of people employed at firms in EAB counties. Lost labor market earnings due to EAB total $11.8 billion, or, $1.2 billion/year over the 10-year period investigated. Many robustness and falsification tests are performed. Keywords Invasive species · Deforestation · Labor market · Wages · Employment effects · EAB JEL Classification J21 · J26 · Q23 · Q51 · Q52 · Q53 · Q57
1 Introduction Invasive species have many impacts on environmental quality and the natural environment. According to the European Environment Agency, non-native species are one of the most important contemporary drivers of ecosystem service change, impacting biodiversity, resource use, natural regulating services (e.g., air and water quality), and social welfare (EEA 2012). The UN Convention on Biological Diversity warns that invasive species “impose an enormous cost on agriculture, forestry, fisheries, as well as on human health” by changing “whole ecosystems” in complex and unpredictable ways (UN CBD 2009). * Benjamin A. Jones [email protected] 1
Department of Economics, University of New Mexico, 1 University of New Mexico, MSC 05 3060, Albuquerque, NM 87131, USA
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Yet, despite the alarmist rhetoric surrounding invasive species, surprisingly few empirical estimates exist on their microeconomic impacts, such as on human health, well-being, educational attainment, and labor market outcomes. Economists have only recently started to study the pathways of effect linking these economic variables of interest to invasives. The few causal inference studies that exist show that deforestation caused by forest-attacking invasive species results in more air pollution (Jones and McDermott 2018), increased cardio-respiratory mortality (Donovan et al. 2013), negative infant health outcomes (Jones 2018), and elevated cardiovascular disease (Donovan et al. 2015). Outside of the small set of causal inference studies, most of the evidence on the socioeconomic impacts of invasive species is anecd
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