Effects of carbon taxes in an economy with large informal sector and rural-urban migration
AbstractI build an equilibrium search and matching model of an economy with an informal sector and rural-urban migration to analyze the effects of budget-neutral green tax policy (raising pollution taxes, while cutting payroll taxes) on the labor market. The key results of the paper suggest that when general public spending varies endogenously in response to tax reform and higher energy taxes can reduce the income from self-employed work in the informal sector, green tax policy can produce a triple dividend: a cleaner environment, lower unemployment rate and higher after-tax income of the private sector. This is due to the ability of the government, by employing public spending as an additional policy instrument, to reduce the overall tax burden when an increase in energy tax rates does not exceed some threshold level. Thus governments should employ several instruments if they are concerned with labor market implications of green tax policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 139.
Date of creation: Dec 2013
Date of revision:
Other versions of this item:
- Karlygash Kuralbayeva, 2013. "Effects of Carbon Taxes in an Economy with Large Informal Sector and Rural-Urban Migration," Economics Series Working Papers OxCarre Research Paper 12, University of Oxford, Department of Economics.
- Karlygash Kuralbayeva, 2014. "Efects of Carbon Taxes in an Economy with Large Informal Sector and Rural-Urban Migration," OxCarre Working Papers 125, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-22 (All new papers)
- NEP-DGE-2013-11-22 (Dynamic General Equilibrium)
- NEP-ENE-2013-11-22 (Energy Economics)
- NEP-ENV-2013-11-22 (Environmental Economics)
- NEP-IUE-2013-11-22 (Informal & Underground Economics)
- NEP-MIG-2013-11-22 (Economics of Human Migration)
- NEP-PBE-2013-11-22 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mathan Satchi & Jonathan Temple, 2009.
"Labor Markets and Productivity in Developing Countries,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 183-204, January.
- Mathan Satchi & Jonathan Temple, 2008. "Labour Markets and Productivity in Developing Countries," Studies in Economics 0805, Department of Economics, University of Kent.
- Mathan Satchi & Jonathan Temple, 2008. "Online Appendix for "Labor Markets and Productivity in Developing Countries"," Technical Appendices 06-167, Review of Economic Dynamics.
- James Albrecht & Lucas Navarro & Susan Vroman, 2009.
"The Effects of Labour Market Policies in an Economy with an Informal Sector,"
Royal Economic Society, vol. 119(539), pages 1105-1129, 07.
- James Albrecht & Lucas Navarro & Susan Vroman, 2008. "The Effects of Labour Market Policies in an Economy with an Informal Sector," ILADES-Georgetown University Working Papers inv208, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
- James Albrecht & Lucas Navarro & Susan Vroman, 2006. "The Effects of Labor Market Policies in an Economy with an Informal Sector," Working Papers gueconwpa~06-06-06, Georgetown University, Department of Economics.
- Albrecht, James & Navarro, Lucas & Vroman, Susan, 2006. "The Effects of Labor Market Policies in an Economy with an Informal Sector," IZA Discussion Papers 2141, Institute for the Study of Labor (IZA).
- Bosch, Mariano & Esteban-Pretel, Julen, 2012. "Job creation and job destruction in the presence of informal markets," Journal of Development Economics, Elsevier, vol. 98(2), pages 270-286.
- Mike Waugh & David Lagakos & Doug Gollin, 2011.
"The Agricultural Productivity Gap in Developing Countries,"
2011 Meeting Papers
1397, Society for Economic Dynamics.
- Douglas Gollin, 2012. "The Agricultural Productivity Gap in Developing Countries," 2012 Meeting Papers 510, Society for Economic Dynamics.
- Douglas Gollin & David Lagakos & Michael E. Waugh, 2011. "The Agricultural Productivity Gap in Developing Countries," Working Papers 11-14, New York University, Leonard N. Stern School of Business, Department of Economics.
- James M. Poterba, 1993. "Global Warming Policy: A Public Finance Perspective," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 47-63, Fall.
- Yazid Dissou & Lilia Karnizova & Qian Sun, 2012. "Industry-level Econometric Estimates of Energy-capital-labour Substitution with a Nested CES Production Function," Working Papers 1214E, University of Ottawa, Department of Economics.
- Jacoby, Henry D. & Reilly, John M. & McFarland, James R. & Paltsev, Sergey, 2006. "Technology and technical change in the MIT EPPA model," Energy Economics, Elsevier, vol. 28(5-6), pages 610-631, November.
- Zenou, Yves, 2008. "Job search and mobility in developing countries. Theory and policy implications," Journal of Development Economics, Elsevier, vol. 86(2), pages 336-355, June.
- John Hassler & Per Krusell & Conny Olovsson, 2012.
"Energy-Saving Technical Change,"
NBER Working Papers
18456, National Bureau of Economic Research, Inc.
- Ulyssea, Gabriel, 2010. "Regulation of entry, labor market institutions and the informal sector," Journal of Development Economics, Elsevier, vol. 91(1), pages 87-99, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The GRI Administration).
If references are entirely missing, you can add them using this form.