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Environmental tax reform in an overlapping-generations economy with involuntary unemployment

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  • Tetsuo Ono

    (Osaka University)

Abstract

This report presents an overlapping-generations model in which (1) pollution is generated as a by-product of capital, and (2) employment is rationed by monopolistic trade unions. We consider an environmental tax reform, consisting of a labor tax cut and the introduction of an environmental tax, and investigate whether the reform attains improvements of employment, environmental quality, and the nonenvironmental utility of the employed and the unemployed. It is shown that the reform attains the improvements within a generation but fails to attain them across generations. The reform yields a trade-off between current and future generations in terms of nonenvironmental utility.

Suggested Citation

  • Tetsuo Ono, 2008. "Environmental tax reform in an overlapping-generations economy with involuntary unemployment," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 9(4), pages 213-238, December.
    • Handle: RePEc:spr:envpol:v:9:y:2008:i:4:d:10.1007_bf03354009
    DOI: 10.1007/BF03354009
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    Cited by:

    1. Xavier Pautrel, 2018. "Environmental Policy and Health in the Presence of Labor Market Imperfections," TEPP Working Paper 2018-09, TEPP.
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    3. De Gobbi, Maria Sabrina., 2011. "Mainstreaming environmental issues in sustainable enterprises : an exploration of issues, experiences and options," ILO Working Papers 994620973402676, International Labour Organization.

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