“Unemployment and Regulatory Policy”

That's the name of this article by University of Chicago law profs Jonathan Masur and Eric Posner. When a federal regulatory agency proposes a rule–say, a rule seeking to promote product safety or environmental quality–the agency generally does an cost-benefit analysis. It often does a separate analysis of the the rule's effect on employment. In this article, Masur and Posner say that the employment analysis should be part of the cost-benefit analysis, and they attempt to refute the counter-arguments that have been lodged against their proposal. Here's the abstract:

In an
earlier article, Regulation, Unemployment, and Cost-Benefit Analysis, we
argued that regulatory agencies should incorporate the costs of
unemployment into cost-benefit analyses of proposed regulations. We
argued that alternatives to including unemployment costs in cost-benefit
analysis — including feasibility analysis and job loss analysis — make
little sense because they do not specify the threshold at which job loss
is excessive and do not explicitly make tradeoffs between unemployment
effects and social gains. Our paper was cited in a 2012 draft OMB
report that sought advice from commentators as to whether cost-benefit
analysis should incorporate unemployment costs and, if so, how it should
do so. This chapter, prepared for a volume on the treatment of
unemployment costs within cost-benefit analysis, builds and expands upon
that earlier work. We first respond to some important questions and
critiques that commentators have raised regarding our paper in the
intervening years since we published it. We then discuss some broader
issues raised by the debate about the incorporation of unemployment
costs into cost-benefit analysis, including the role of “second-order”
or remote costs and benefits and the treatment of the ex ante incentives
of regulation.

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