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Migration and Tax Competition Within a Union

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  • Razin, Assaf
  • Sadka, Efraim

Abstract

We develop a stylized EU-type model of a union consisting of rich, capital-abundant and productive, countries, and poor,capital-scarce and low productivity, countries, in order to explain key features of tax policies and inter- and intra-migration flows. Our purpose is to explain the differences in the tax rates and the generosity of the welfare state, on the one hand, and migration flows, on the other hand, between rich and poor countries, within the union, and migration flows from the rest of the world. We identify a fiscal externality which makes the tax competition and the tax coordination regime to be different one from the other.

Suggested Citation

  • Razin, Assaf & Sadka, Efraim, 2013. "Migration and Tax Competition Within a Union," CEPR Discussion Papers 9600, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9600
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    References listed on IDEAS

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    Cited by:

    1. Olena V. Sokolovska, 2016. "Race to the bottom in international tax competition: some conceptual issues," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 2(2), pages 98-110.
    2. Soojin Kim, 2014. "The Effects of Labor Migration on Optimal Taxation: An International Tax Competition Analysis," 2014 Meeting Papers 508, Society for Economic Dynamics.

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    More about this item

    Keywords

    Capital mobility; Fiscal leakage; Labor mobility;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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