An understanding on the relationship between the employment and the environmental policy

This study proposes a bridge between traditional production technology and pollution abatement technology. It is assumed that a positive externality from pollution abatement improves the productivity of the production factor and thus externality can explain the effects of the environmental policy on job creation. Furthermore, this study proposes some viable remedial steps for policy-makers which would enable them to design a more effective policy by taking into account both the direction of technology advancement and the current level of pollution abatement technology, which are considered to be important for firms to increase their labour demand.