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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.
    2. Sen, Anindita & Acharyya, Rajat, 2012. "Environmental standard and employment: impact of productivity effect," Environment and Development Economics, Cambridge University Press, vol. 17(2), pages 207-225, April.
    3. Morgenstern, Richard D. & Pizer, William A. & Shih, Jhih-Shyang, 2002. "Jobs Versus the Environment: An Industry-Level Perspective," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 412-436, May.
    4. Roberton C. Williams III, 2002. "Environmental Tax Interactions When Pollution Affects Health or Productivity," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 13, pages 200-209, Edward Elgar Publishing.
    5. Aaditya Mattoo & Harsha V. Singh, 1994. "Eco‐Labelling: Policy Considerations," Kyklos, Wiley Blackwell, vol. 47(1), pages 53-65, February.
    6. Wesley Nimon & John Beghin, 2017. "Ecolabels And International Trade In The Textile And Apparel Market," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 18, pages 321-326, World Scientific Publishing Co. Pte. Ltd..
    7. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
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    9. Bansal, Sangeeta & Gangopadhyay, Shubhashis, 2003. "Tax/subsidy policies in the presence of environmentally aware consumers," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 333-355, March.
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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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