 Are pollution permit markets harmful for employment?Nicolas Sanz and Sonia Schwartz Economic Modelling, 2013, vol. 35, issue C, 374-383 Abstract: This paper analyzes the effects of pollution permit markets on equilibrium employment in a wage-setting/price-setting (WS–PS) model. The employment level is determined according to different methods of financing unemployment benefits: a wage tax or the revenue from a pollution permit auction. We show that a permit market weakens the trade unions' market power. Furthermore, whatever the method of financing unemployment benefits, the choice of the pollution cap is always neutral for employment, and the level of employment always increases as the pollution abatement technology becomes more efficient. Depending on the value of the wage tax, the employment level can be higher or lower when unemployment benefits are financed by pollution permits rather than wage tax. Keywords: Monopolistic competition; Equilibrium employment; Pollution permit market; Unemployment benefits (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:35:y:2013:i:c:p:374-383 DOI: 10.1016/j.econmod.2013.07.009 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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