Double Dividend with Involuntary Unemployment: Efficiency and Intergenerational Equity
This paper analyzes the double dividend and distributional issues within an overlapping generations models framework with involuntary unemployment. We characterize the necessary conditions for the obtention of a double dividend when the revenue of the environmental tax is recycled by a variation of the labor tax rate. We show that an employment dividend may occur without any efficiency dividend and that the young generation is not always harmed by the fiscal reform, even without any intergenerational transfers. Therefore, three dividends (environmental, efficiency and intergenerational equity) can simultaneously occur.
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Volume (Year): 31 (2005)
Issue (Month): 4 (08)
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