NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Holly Monti

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April 2010Can Pollution Tax Rebates Protect Low-Income Families? The Effects of Relative Wage Rates
with Don Fullerton: w15935
Pollution taxes are believed to burden low-income households that spend a greater than average share of income on pollution-intensive goods. Some propose to offset that effect by returning revenue to low-income workers via reduced labor tax. We build analytical general equilibrium models with both skilled and unskilled labor, and we solve for expressions that show the change in the real net wage of each group. A decomposition shows the effect of the tax rebate, the effect on the uses side of income (higher product prices), and the effect on the sources side of income (relative wage rates). We also include numerical examples. Even though the pollution tax injures both types of labor, we find that returning all of the revenue to the low-skilled workers is still not enough to offset the ...

Published: “Can Pollution Tax Reba tes Protect Low - Wage Earners? ”, with H. Monti, Journal of Environme ntal Economics and Management ( Vol.66, No.3, November, 2013 ).

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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