Environmental control, wage inequality and national welfare in a tourism economy

Chi-Chur Chao, Jean-Pierre Laffargue and Pasquale Sgro ()

International Review of Economics & Finance, 2012, vol. 22, issue 1, 201-207

Abstract: This paper examines the effects of stricter environmental regulation on income distribution and welfare for an open economy with inbound tourism. The pollution input is considered as a mobile factor between sectors, and a decrease in it lowers wages of skilled labor in the traded sector but can increase the wages of unskilled labor in the non-traded sector. A stricter policy on environmental controls can narrow wage inequality and increase welfare if the tourism terms-of-trade effect dominates. These results are confirmed by simulations.

Keywords: Environmental control; Wage inequality; Welfare; Tourism (search for similar items in EconPapers)
JEL-codes: F10 Q38 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:22:y:2012:i:1:p:201-207

DOI: 10.1016/j.iref.2011.10.013

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