IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Environmental Tax Reform in a Small Open Economy with Structural Unemployment

  • Holmlund, Bertil

    ()

    (Department of Economics)

  • Kolm, Ann-Sofie

    ()

    (Department of Economics)

The paper examines the effects of an environmental tax reform in a model of a small open economy with decentralised wage bargaining and monopolistically competitive firms. The economy includes a tradable sector as well as a non-tradable sector and features unemployment in general equilibrium. Firms in both sectors use labour and an imported polluting factor of production (”energy”). A tax on energy, recycled to reduce the payroll tax, will in general affect equilibrium unemployment in this economy. The effect works through a reallocation of employment from the tradable to the non-tradable sector. Total employment increases if workers in the tradable sector receive a wage premium relative to workers in the non-tradable sector. The sectoral relative wage is determined by the relative bargaining power of the unions and by parameters of preferences and technology. Parameterised versions of the model suggest that the tax reform has small effects on employment and that it typically reduces real GDP.

If 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.

File URL: http://www.nek.uu.se/pdf/1997wp2.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Katarina Grönvall)


Download Restriction: no

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1997:2.

as
in new window

Length: 30 pages
Date of creation: 27 Aug 1998
Date of revision:
Publication status: Published in International Tax and Public Finance, 2000, pages 315-333.
Handle: RePEc:hhs:uunewp:1997_002
Contact details of provider: Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Koskela, Erkki & Schöb, Ronnie & Sinn, Hans-Werner, 1998. "Pollution, Factor Taxation and Unemployment," Munich Reprints in Economics 19493, University of Munich, Department of Economics.
  2. Carraro, Carlo & Galeotti, Marzio & Gallo, Massimo, 1996. "Environmental taxation and unemployment: Some evidence on the 'double dividend hypothesis' in Europe," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 141-181, October.
  3. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
  4. Strand, Jon, 1998. " Pollution Taxation and Revenue Recycling under Monopoly Unions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(4), pages 765-80, December.
  5. Bovenberg, A.L. & van der Ploeg, F., 1996. "Optimal taxation, public goods and environmental policy with involuntary unemployment," Other publications TiSEM 2a1a87d9-2ed9-41a7-b3aa-b, School of Economics and Management.
  6. Bovenberg, A Lans & van der Ploeg, Frederick, 1998. " Tax Reform, Structural Unemployment and the Environment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(3), pages 593-610, September.
  7. Christopher Pissarides, 1997. "The impact of employment tax cuts on unemployment and wages : the role of unemployment benefits and tax structure," LSE Research Online Documents on Economics 2332, London School of Economics and Political Science, LSE Library.
  8. Richard Jackman & Richard Layard & Stephen Nickell, 1996. "Combatting Unemployment: Is Flexibility Enough?," CEP Discussion Papers dp0293, Centre for Economic Performance, LSE.
  9. Jonathan Gruber, 1995. "The Incidence of Payroll Taxation: Evidence from Chile," NBER Working Papers 5053, National Bureau of Economic Research, Inc.
  10. Erkki Koskela & Ronnie Schöb & Hans-Werner Sinn, 1998. "Pollution, Factor Taxation and Unemployment," International Tax and Public Finance, Springer, vol. 5(3), pages 379-396, July.
  11. Holmlund, Bertil, 1997. "Macroeconomic Implications of Cash Limits in the Public Sector," Economica, London School of Economics and Political Science, vol. 64(253), pages 49-62, February.
  12. Kolm, Ann-Sofie, 1998. "Differentiated payroll taxes, unemployment, and welfare," Journal of Public Economics, Elsevier, vol. 70(2), pages 255-271, November.
  13. Johnson, G.E. & Layard, P.R.G., 1987. "The natural rate of unemployment: Explanation and policy," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 16, pages 921-999 Elsevier.
  14. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer, vol. 2(2), pages 157-183, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hhs:uunewp:1997_002. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarina Grönvall)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.