Labour Market Rigidities and Environmental Tax Reforms: Welfare Effects of Different Regimes
AbstractThe working of the labour market is important for the total welfare effects of tax reforms. This paper analyses, by using a computable general equilibrium model for the Norwegian economy, how different assumptions about labour mobility between industries and wage formation influence the non-environmental welfare effects of an environmental tax reform. Three different alternatives are analysed; competitive labour market, immobility and wage rigidity, and wage formation through union wage bargaining. The welfare effects differ substantially between the alternatives, depending especially on the total tax wedge on labour.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 242.
Date of creation: Dec 1998
Date of revision:
Dynamic equilibrium analysis; Imperfect labour markets; Environmental tax reforms;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D60 - Microeconomics - - Welfare Economics - - - General
- D90 - Microeconomics - - Intertemporal Choice - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- 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
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
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