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Environmental control, wage inequality and national welfare in a tourism economy

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Author Info

  • Chao, Chi-Chur
  • Laffargue, Jean-Pierre
  • Sgro, Pasquale M.

Abstract

This paper examines the effects of stricter environmental regulation on income distribution and welfare for an open economy with inbound tourism. The pollution input is considered as a mobile factor between sectors, and a decrease in it lowers wages of skilled labor in the traded sector but can increase the wages of unskilled labor in the non-traded sector. A stricter policy on environmental controls can narrow wage inequality and increase welfare if the tourism terms-of-trade effect dominates. These results are confirmed by simulations.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 22 (2012)
Issue (Month): 1 ()
Pages: 201-207

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Handle: RePEc:eee:reveco:v:22:y:2012:i:1:p:201-207

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Web page: http://www.elsevier.com/locate/inca/620165

Related research

Keywords: Environmental control; Wage inequality; Welfare; Tourism;

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References

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Cited by:
  1. Beladi, Hamid & Liu, Lu & Oladi, Reza, 2013. "On pollution permits and abatement," Economics Letters, Elsevier, vol. 119(3), pages 302-305.

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