This paper introduces the panel “Beyond Compliance Costs: The Effects of Regulation on Employment,” and organizes the discussion of accounting for employment effects in regulatory analysis and in rulemaking oversight, by drawing various analogies to prior improvements (and controversies) in risk assessment and benefits valuation methods. 

Greater attention has recently been focused on how to measure and account for the effects of government regulation on employment.  Examples of questions that might be raised include: (1) Are environmental, safety, health, and financial regulations a significant source of net job loss;  (2) How should regulatory agencies estimate the cost to the individual and to society of each net lost job (accounting, perhaps, for both the direct costs of unemployment, retraining, relocation, etc., and for the physical and psychological toll on the individual affected);  (3) To what extent are employment (and productivity, and innovation, and other) effects already accounted for when we use compliance costs as the measure to which regulatory benefits are compared?

One way to organize and prioritize our thinking about questions such as these is to try to learn from the analogous experiences scientists and economists have had trying to add rigor and transparency to how we assess risks and regulatory benefits.

An overarching theme of the presentation will be the virtue of trying to balance the attention paid to refining all parts of the regulatory analysis, so that resources will not be squandered (and decision-makers will not be given overconfident predictions) by “looking under the lamppost” where the analysis is strongest.