Potential effects of environmental taxes on employment: A study on EU countries

This thesis aims to analyze the potential effects of environmental taxes on employment by examining the balance between environmental sustainability goals and economic development. Focusing on European Union (EU) countries, the research aims to deepen the understanding of the impact of environmental policies on employment dynamics. A significant portion of the study involves comparing environmental policies across EU countries to determine whether they have a positive effect on employment. These comparisons will help us understand the effects of eco-friendly policies on job creation or reduction. The results will provide valuable insights for policymakers in understanding the potential effects of environmental taxes on employment and determining the role of eco-friendly policies in employment. In this study, the relationship between environmental taxes and employment in EU countries is examined using the Panel Smooth Transition Regression (PSTR) model for the period 1995-2021. According to the analysis results, it was found that the share of environmental taxes in GDP, considered as the threshold variable, is 3.247%. In this context, employment is positively affected when environmental taxes are below the threshold level, but negatively affected when they exceed this level. Therefore, our findings indicate that environmental taxes may positively affect employment up to a certain level, but beyond this level, negative effects may be observed. This study contributes to the understanding of the effects of environmental taxes on employment and provides an important foundation for future policy-making and research.