Pigou Club, Mobility & Unemployment

There has been a lot of talk recently about the idea that unemployment is correlated with home ownership. The idea behind the theory (as I understand it) is that people are unwilling to change homes, and so are not mobile enough to take full advantage of their workplace opportunities. Given this, would a carbon tax also lend itself to higher unemployment? If I am willing to drive to any job within three gallons of my home at the current gasoline price, but only one and a half gallons when gas is $4.50 a gallon… Cars, for all the pain they cause, are a very easy way to get around; taxing gasoline would most likely lead to a decrease in mobility.

Comments are open… :-)

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