We introduce the link between pollution, morbidity and productivity over the life-cycle in a two-period overlapping generations model. As the environmental tax improves the health-profile over the life-cycle, it influences saving, investment in health, labor supply and retirement. As a result,...

We build a model that takes into consideration the evolution of health over the life cycle and its consequences on individual optimal choices. In this framework, the effects of environmental taxation are not limited to the traditional negative crowding-out and positive productivity effects. We...