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RGGI linked to lower wages for unskilled energy-sector workers

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A man in a dark jacket operates or inspects a large industrial metal machine or equipment in a factory floor setting with industrial equipment visible in the background.
Research area:Labour economicsEconomics and EconometricsClimate Change Policy and Economics

What the study found

The study found that after the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program for greenhouse gas emissions, unskilled workers in energy-intensive sectors experienced a significant and immediate drop in annual wage income. The wage decline grew over time and reached about 7% four years after the reform.

Why the authors say this matters

The authors suggest the findings show that climate policy can have uneven labor market effects across different groups of workers. They conclude that the wage impacts were concentrated among unskilled workers in energy-intensive sectors, while other worker groups did not show the same pattern.

What the researchers tested

The researchers used an event-study design, which compares outcomes before and after a policy change over time. They analyzed Current Population Survey data from 2000 to 2020 and compared labor market outcomes in RGGI states with those in non-RGGI states.

What worked and what didn't

The clearest effect was a decline in annual wage income for unskilled workers in energy-intensive sectors. For skilled workers, the wage effects were less consistent and generally not statistically significant, although some post-treatment years showed negative estimates. The study found no significant effects on weeks worked, unemployment probability, or outcomes for workers in non-energy-intensive sectors.

What to keep in mind

The abstract does not describe specific limitations beyond the comparison between RGGI and non-RGGI states. The results are based on labor market outcomes observed in the available survey data from 2000 to 2020.

Key points

  • Unskilled workers in energy-intensive sectors saw a significant and immediate decline in annual wage income after RGGI.
  • The wage effect for unskilled workers grew over time and peaked at about a 7% reduction four years after reform.
  • Skilled workers showed less consistent wage effects, and most were not statistically significant.
  • No significant effects were found for weeks worked or unemployment probability.
  • Workers in non-energy-intensive sectors did not show significant outcome changes.

Disclosure

Research title:
RGGI linked to lower wages for unskilled energy-sector workers
Authors:
Salman Almutawa, Khaled Bastaki, Jayendira P Sankar
Institutions:
University College of Bahrain, University of Bahrain, University of Reading
Publication date:
2026-03-08
DOI:
10.1007/s44282-026-00345-2
OpenAlex record:
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AI provenance: This post was generated by gpt-5.4-mini (OpenAI). The original authors did not write or review this post.