Recycling of carbon/energy taxes and the labor market

Heinz Welsch

Environmental & Resource Economics, 1996, vol. 8, issue 2, 155 pages

Abstract: This paper provides a quantitative assessmet of a cost shift from labor to energy by means of a carbon/energy tax. The analysis utilizes a general equilibrium model for the European Community, placing the emphasis on the modeling of labor supply. The paper highlights the importance of the feedback from an induced increase in labor demand to wage formation. It shows that the goals of CO 2 reduction and improved employment are complementary, provided the reduction in labor costs financed by the carbon/energy tax is not offset by increased wage claims. Under this condition, reduced CO 2 is consistent with an increase in GDP. Copyright Kluwer Academic Publishers 1996

Keywords: general equilibrium model; carbon tax; labor market (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (18)

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DOI: 10.1007/BF00357361

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