Regressive Effects of Regulation on Wages
25 Pages Posted: 12 Feb 2018 Last revised: 5 Mar 2018
Date Written: February 9, 2018
A growing body of literature analyzing the distributive consequences of regulation suggests that regulation may have particularly detrimental effects on lower income households. Regulation can be regressive if it represents the preferences of the wealthy while imposing costs on all households. The specific channel by which regulation may impose costs on lower income households is through its effect on prices and wages. In this issue, Dustin Chambers, Courtney Collins, and Allan Krause (2018) find that regulation has regressive effects through its effect on consumer prices because lower income consumers tend to spend a larger percentage of their budget on highly regulated goods and services. In this paper, we seek to analyze the effect of regulation on wages across different income levels and occupations.
Keywords: regulation, wages, inequality, employment
JEL Classification: K23, L51
Suggested Citation: Suggested Citation