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Environmental Policy Reforms and the Labor Market in a Global Economy

Author

Listed:
  • Aronsson, Thomas

    (Department of Economics, Umeå University)

  • Jonsson, Thomas

    (Department of Economics, Umeå University)

  • Sjögren, Tomas

    (Department of Economics, Umeå University)

Abstract

In this paper, we consider the welfare effects of environmental policy cooperation in a two-country economy. We assume that the countries finance their public expenditures by using distortionary taxes, and that the countries differ with respect to competition in the labor market. The purpose is to characterize the cost benefit rule for a policy reform, where the countries involved agree to slightly increase their expenditures on abatement. We show how the welfare effect of the policy reform depends on changes in environmental damage, employment and work hours. We also relate the welfare effects of policy cooperation to the characteristics of the fiscal policies in the prereform equilibrium.

Suggested Citation

  • Aronsson, Thomas & Jonsson, Thomas & Sjögren, Tomas, 2004. "Environmental Policy Reforms and the Labor Market in a Global Economy," Umeå Economic Studies 629, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0629
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    Cited by:

    1. Thomas Aronsson Aronsson & Thomas Jonsson & Tomas Sjögren, 2006. "Environmental Policy and Optimal Taxation in a Decentralized Economic Federation," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(3), pages 437-454, September.

    More about this item

    Keywords

    Policy cooperation; distortionary taxes; labor market; Nash game; Stackelberg game;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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