Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
A model where a given number of firms determine their pollution‐reducing production technologies upon establishment and workers form monopoly unions is used to study the possibility of “double dividends”, i.e., simultaneous reductions in pollution and increases in employment, when the pollution tax is increased, and tax revenues recycled, in alternative ways. In all cases pollution is reduced. When output is subsidized, the effect of a pollution tax increase on employment is always neutral. When employment, and investments, are subsidized, employment increases when investments are, respectively, relatively insensitive and sensitive to pollution taxes. Of the three subsidy instruments, the employment subsidy is always the most, and the investment subsidy the least efficient solution.