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Employment Double Dividend and Wage Determination

Author

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  • Mireille Chiroleu-Assouline

    (ERASME - Équipe de Recherche en Analyse des Systèmes et Modélisation Économique - Ecole Centrale Paris, EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Lionel Lemiale

    (ERASME - Équipe de Recherche en Analyse des Systèmes et Modélisation Économique - Ecole Centrale Paris, EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the double dividend issue in a general equilibrium model of a closed economy in which polluter are firms and households, and firms are monopolistic competitors on the non polluting good market. We compare the effects of the reform on employment for two non-competitive labor-market scenarios: a wage bargaining model and an efficiency wage model. Moreover, three characteristics of the unemployment benefits are considered: fixed in real terms, indexed to production price or fixed replacement ratio. It is shown that if environmental taxes pre-exist, such a reform can boost employment if and only if at least households energy consumption is taxed regardless the unemployment scenarios. Moreover the reform yields more easily a second dividend if wages are negotiated than in efficiency wage model. Finally, the maximum level of initial environmental taxes rates compatible with an employment dividend depends on the characteristics of the unemployment benefits.

Suggested Citation

  • Mireille Chiroleu-Assouline & Lionel Lemiale, 2001. "Employment Double Dividend and Wage Determination," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00471276, HAL.
    • Handle: RePEc:hal:cesptp:hal-00471276
    Note: View the original document on HAL open archive server: https://paris1.hal.science/hal-00471276
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    1. Mireille Chiroleu-Assouline & Mouez Fodha, 2011. "Verdissement de la fiscalité. À qui profite le double dividende ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 409-431.

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