Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155065
Authors: 
Marsiliani, Laura
Renström, Thomas I.
Year of Publication: 
2000
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 11. 2000
Abstract: 
The paper explores the hypothesis of a double dividend from environmental taxation i.e. whether shifting the burden of taxation away from labour toward the environment can boost employment and increase welfare. We present a general-equilibrium model where the economy is distorted by labour taxes, monopolistic product-market competition, and union-wage bargaining. We find that employment and welfare always increase when the revenue from the introduction of a Pigouvian tax (imposed on firms and households) is fully recycled to cut the rate of the pre-existing labour tax. Moreover, it turns out that the degree of the imperfections influences the magnitude of the effects of the reform. We also offer numerical results for the case in which the pollution tax is positive at the outset.
Subjects: 
double dividend
environmental tax reform
imperfect competition
welfare
JEL: 
E62
H20
H23
H30
Document Type: 
Working Paper

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