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Eco-Labelling and the Labour Market

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  • Sen, Anindita

Abstract

In this paper I try to analyse the impact of environmental policies in the presence of eco-labelling on the wage level and production levels. For this I start with a general equilibrium framework where a country produces two traded goods using labour and capital, one of which pollutes when consumed. The pollution generated depends on the abatement technology used by the firms and also the scale of production and affects the health of workers and labour productivity. Since the consumers are adversely affected by the pollution generation, they are willing to pay a higher price for a cleaner variety of the dirty good. However, since the pollution is generated during production, they cannot judge the cleanliness of a good. Here the government steps in, monitors the pollution generation and issues an eco-labelling certificate regarding the quality. In this framework, analyse the impact of environmental standards on the wage levels and production. I find that a minimum standard adversely affects the wage rate, unless the productivity effect is very small. However, the eco-labelling process aides the labour market as it tempers the impact of the standard on wages.

Suggested Citation

  • Sen, Anindita, 2012. "Eco-Labelling and the Labour Market," MPRA Paper 49169, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49169
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    References listed on IDEAS

    as
    1. Copeland, Brian R. & Taylor, M. Scott, 1999. "Trade, spatial separation, and the environment," Journal of International Economics, Elsevier, vol. 47(1), pages 137-168, February.
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    5. Ichiroh Daitoh, 2003. "Environmental Protection and Urban Unemployment: Environmental Policy Reform in a Polluted Dualistic Economy," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 496-509, August.
    6. Williams, Roberton III, 2002. "Environmental Tax Interactions when Pollution Affects Health or Productivity," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 261-270, September.
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    More about this item

    Keywords

    Eco-labelling; environmental standard; general equilibrium; product quality;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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