Pollution Abatement Equipment and International Migration

Abstract

By introducing a pollution abatement equipment industry into the Copeland and Taylor (1999) model, we find that the real wage rate will be higher in a developed country with a superior pollution abatement technology. On the other hand, the effects of environmental tax policies on the real wage rate would not clear. Migration has positive effects on the wage rate, the stock of the environmental tax and welfare of the worker in at least one country. Finally we show the possibility that both countries gain from international migration.

JEL Classifications:

• F22
• J61
• Q56

Keywords:

• international migration
• pollution abatement equipment
• economic welfare
• environmental tax