Environmental Tax and Vulnerable Employment: A Global Empirical Evidence

Abstract

The role of government policies in creating employment has remained topical. However, focusing on the relationship between environmental taxes and vulnerable employment is a relatively rare line of academic inquiry in the literature. This study examines the asymmetric relationship between environmental taxes and employment vulnerability. This study provides empirical evidence using the new method of moments quantile regression on a global panel of data from 92 countries from 1994 to 2020. The findings show that restrictive environmental tax policies reduce employment vulnerability across the globe. The findings further show that in low-income and lower-middle-income countries, the impact of environmental taxes has been largely and significantly progressive, which is the case for the American continent. However, in high-income countries, the impact has been emphatically regressive, which is similar to the context of Asia and Europe. These findings, therefore, present ramifications for Sustainable Development Goals and Goal 8 in particular.