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ENVIRONMENTAL POLICY AND LABOUR MARKET IMPERFECTION

Kuo†Hsing Kuo, Cheng†Te Lee and Shang†Fen Wu

Bulletin of Economic Research, 2018, vol. 70, issue 2, 175-184

Abstract: This paper will set up a general equilibrium model with a distorted labour market to explore the effects of an environmental tax and union bargaining power on formal employment and the informal competitive wage. We find that when the government raises the environmental tax, both formal employment and informal competitive wage would fall. In addition, we confirm that a policy of labour market reform would increase both formal employment and the informal competitive wage.

Date: 2018
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