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Association of EU ETS, earnings and employment in manufacturing in Finland

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi
dc.contributor.advisor Liski, Matti
dc.contributor.advisor Huttunen, Kristiina
dc.contributor.author Partanen, Heidi
dc.date.accessioned 2020-04-05T16:00:08Z
dc.date.available 2020-04-05T16:00:08Z
dc.date.issued 2020
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/43725
dc.description.abstract We have investigated how EU emission trading scheme (EU ETS) has associated to the development of earnings of individual employees who have worked in regulated manufacturing factors in Finland when the policy started in 2005. Their earnings are compared to earnings of individuals, who worked in same sectors, but in smaller installations that were not regulated by the policy. The follow-up of individuals between 2000-2016 shows that the workers in EU ETS sectors had on average EUR 5 000 higher annual earnings compared to the control group before the policy started and this difference was diminished by an average EUR 2 800 after the policy started. It seems that this decrease is due to lower employment rate. The treatment group had more than 4 percent unit lower employment rate compared to the control group, which in 2016 translates into 7.5 % lower employment. The earnings of those who were employed decreased by EUR 2 300 when the policy started, but otherwise the employed employees had EUR 5 000 higher earnings compared to the control group also after the policy started. Our set-up doesn’t allow a full causal interpretation that the decrease if fully influenced by the policy, as different industrial sectors are disproportionally represented in the treatment and control group. The previous literature has shown 2 percent decrease in employment and no effect on wages at company-level. At installation-level the effect on employment has been a 7 % decrease, which is in line with our result. We have used individual-based data on annual earnings, which have included information of working station, which was matched to the information of installations’ participation to the policy. As participation to EU ETS is determined at installation-level, our set-up allows more precise results than those conducted at company-level. The result seems to support pollution haven -hypothesis, which states that the policy makes regulated entities less competitive due to increased costs, and therefore production or market shares are outsourced to regions with laxer environmental policies. en
dc.format.extent 48 + 7
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Association of EU ETS, earnings and employment in manufacturing in Finland en
dc.title An empirical event study of earnings and employment of individual employees at installation-level between 2000-2016 en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Taloustieteen laitos fi
dc.subject.keyword EU ETS en
dc.subject.keyword earnings en
dc.subject.keyword employment en
dc.subject.keyword empirical en
dc.subject.keyword ex post en
dc.subject.keyword Finland en
dc.identifier.urn URN:NBN:fi:aalto-202004052755
dc.type.ontasot Master's thesis en
dc.type.ontasot Maisterin opinnäyte fi
dc.programme Economics en
dc.location P1 I fi
local.aalto.electroniconly yes
local.aalto.openaccess yes


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