Consequences of Environmental Tax Reform for Unemployment and Welfare
AbstractWe investigate the welfare effects of environmental tax reform, i.e. raising environmental taxes and using the proceeds to reduce distortionary taxes on labour. The framework of analysis is a small open economy with involuntary unemployment due to a rigid consumer wage. Environmental tax reform boosts not only environmental quality but also employment if substitution between labour and resources is easy, the production share of the fixed factor is large, and the initial tax rates on resources and profits are small. If the initial tax system is sub-optimal with a negligible tax on resources, profits rise as well. Copyright Kluwer Academic Publishers 1998
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 12 (1998)
Issue (Month): 2 (September)
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Web page: http://www.springerlink.com/link.asp?id=100263
double dividend; environmental quality; fixed factor; involuntary unemployment; labour tax; optimal taxation; pollution; tax reform; triple dividend; JEL classification: E60; H21; Q3;
Find related papers by JEL classification:
- JEL - Labor and Demographic Economics - - - - -
- cla - - - - - -
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
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