Environmental protection and urban unemployment

Environmental policy reform in a polluted dualistic economy

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

This paper explores sufficient conditions for the welfare-improving environmental policy reform in the Harris-Todaro economy. A rise in the pollution tax rate in the urban manufacturing has spillover effects on the two labor market distortions: the less-than-optimal manufacturing employment and the urban unemployment. If both are weakened the welfare improves. Otherwise, we need to develop an alternative sufficient condition. It is shown that there exists a range of welfare-improving pollution tax rates, and that it corresponds to the lower values of tax rate. This range may shrink by the wage subsidy policy and the technological change toward less pollution-intensive techniques.

Original languageEnglish
Pages (from-to)496-509
Number of pages14
JournalReview of Development Economics
Volume7
Issue number3
Publication statusPublished - 2003 Aug
Externally publishedYes

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policy reform
unemployment
taxes
environmental protection
environmental policy
pollution tax
welfare
reform
economy
manufacturing
wage subsidies
spillover effect
technological change
wage
labor market
pollution
rate

ASJC Scopus subject areas

  • Development
  • Geography, Planning and Development

Cite this

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