Regressive effects of regulation
Regulation of health and safety has placed an unacknowledged burden on low-income households and workers. Billions of dollars are spent every year on regulations that seek to reduce life-threatening risks that arise from auto travel, air travel, air and water pollution, food, drugs and construction; the list goes on. Today, some form of regulation affects nearly every aspect of our lives (Shleifer, in: Kessler (ed) Regulation vs. litigation: perspectives from economics and law, University of Chicago Press, Chicago, 2010). All of the regulatory rules ostensibly intend to make consumers or workers better off, but the cost of regulation usually is borne by the same consumers and workers, reducing their ranges of choice; it therefore crowds out private spending. The crowding out effect can be particularly detrimental for low-income households. This special issue explores the various ways in which regulation may have such regressive effects as well as the political determinants of how regulation, despite its unfavorable consequences for low-income households, may come about.
KeywordsRegulation Regressive effects Income
JEL ClassificationD72 D31 H11
I would like to thank Dr. William F. Shughart III for his helpful comments and suggestions on all the papers in this special issue. In addition, I would like to thank the contributors for their thoughtful and well-developed articles as well as their participation in several rounds of reviews and conference presentations leading up to the publication of this special issue. Finally, I would like to thank the Mercatus Center at George Mason University for their support of several of the contributions in this special issue including this introduction.
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