Unemployment and environmental regulation in general equilibrium

The effects on the unregulated industry suggest that empirical studies of environmental regulation that focus only on regulated firms can be misleading, significantly overstating the net employment effects (and those that use nonregulated firms as controls for regulated firms will be even more misleading, overstating both the net effects and effects on the regulated industry). This implies that overall effects on employment are less of an issue for environmental policy than the empirical literature might suggest.