Environmental Taxes and Wage Setting Structure

Juan Bárcena-Ruiz and María Garzon ()

Prague Economic Papers, 2009, vol. 2009, issue 4, 353-365

Abstract: The literature on the environment shows that imperfect competition in global markets creates a strategic interaction between governments that can lead to the ineficient distortion of environmental taxes. This literature does not consider that workers can set up different organizational structures to set wages. We assume that under decentralized wage setting there is an independent union in each irm while under centralized wage setting there is an industry-wide union that sets the wages of all irms. We show that under a decentralized structure governments choose environmental taxes closer to those which are socially eficient than those chosen under a centralized structure. However, environmental damage is greater in the former case.

Keywords: international trade; oligopoly; environmental taxes; unions´ structure (search for similar items in EconPapers)
JEL-codes: H23 J51 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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DOI: 10.18267/j.pep.359

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