Employment double dividend hypothesis with the presence of a trade union

Yongying Wang () and Kadohognon Ouattara

Economics Letters, 2020, vol. 193, issue C

Abstract: Trade unions have a long history in countries all over the world and play a crucial role in the wages of employees through the mechanism of wage bargaining. However, this is often ignored in studies on environmental taxation. We consider a differentiated duopoly competing in a Cournot space after the wages of employees are negotiated with a trade union. We show that a positive emissions tax (resp. an emissions subsidy) is always optimal when emissions per unit of production are too high (resp. less than a certain threshold). When the emissions level is within a certain range, the union’s bargaining power impacts the government’s environmental policy choice between a positive emissions tax and an emissions subsidy.

Keywords: Environmental taxes; Product differentiation; Wage bargaining; Cournot (search for similar items in EconPapers)
JEL-codes: H23 L13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:193:y:2020:i:c:s0165176520301841

DOI: 10.1016/j.econlet.2020.109273

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