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Environmental policy and human capital inequality: A matter of life and death

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  • Constant, Karine

Abstract

This paper analyzes the economic implications of an environmental policy when we account for the life expectancy of heterogeneous agents. In a framework in which everyone suffers from pollution but health status also depends on individual human capital, we find that the economy may be stuck in a trap in which inequality rises steadily, especially when the initial pollution intensity of production is too high. We emphasize that such inequality is in the long run costly for the economy in terms of health and growth. Therefore, we study whether a tax on pollution associated with an investment in pollution abatement can be used to address this situation. We show that a stricter environmental policy may allow the economy to escape from the inequality trap while enhancing the long-term growth rate when the initial inequality in human capital is not too large.

Suggested Citation

  • Constant, Karine, 2019. "Environmental policy and human capital inequality: A matter of life and death," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 134-157.
    • Handle: RePEc:eee:jeeman:v:97:y:2019:i:c:p:134-157
    DOI: 10.1016/j.jeem.2018.04.009
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    Cited by:

    1. Constant, Karine & Davin, Marion, 2021. "Pollution, children’s health and the evolution of human capital inequality," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 9-25.
    2. Fabio Mariani & Agustin Pérez-Barahona & Natacha Raffin, 2019. "Population and the environment: the role of fertility, education and life expectancy," Post-Print hal-02327510, HAL.
    3. Anna Dugan & Alexia Prskawetz & Natacha Raffin, 2024. "The environment, life expectancy, and growth in overlapping generations models: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1593-1621, December.
    4. Hui Deng & Rui Du & Dongmei Guo & Weizeng Sun & Yuhuan Xia, 2023. "High‐stakes examinations and educational inequality: Evidence from transitory exposure to air pollution," Economic Inquiry, Western Economic Association International, vol. 61(3), pages 546-571, July.
    5. Gori, Luca & Lupi, Enrico & Manfredi, Piero & Sodini, Mauro, 2020. "A contribution to the theory of economic development and the demographic transition: fertility reversal under the HIV epidemic," Journal of Demographic Economics, Cambridge University Press, vol. 86(2), pages 125-155, June.
    6. Mahmood, Haider, 2020. "Level of Education and Renewable Energy Consumption Nexus in Saudi Arabia," MPRA Paper 109141, University Library of Munich, Germany.
    7. Yiping Gao & Rong Yuan & Shenglin Zheng, 2022. "Effects of Human Capital on Energy Consumption: The Role of Income Inequality," IJERPH, MDPI, vol. 19(24), pages 1-17, December.

    More about this item

    Keywords

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    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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