Aronsson, Thomas () (Department of Economics, Umeå University) Blomquist, Sören () (Department of Economics, Uppsala University) Micheletto, Luca () (Istituto di Economia Politica, Università "L. Bocconi")
Abstract
There is a rich literature analyzing the problems that will arise as the share of elderly and retired in the population increases in the near future. However, the locational decisions among the elderly as well as their implications in terms of taxes/transfers and of allocation of responsibilities for elderly care between the federal and local levels have not received much attention. In this paper we aim at investigating these issues. For this purpose we explore a model where there is a big city and a set of small villages and where congestion effects and agglomeration forces are at work at the level of the big city. We also assume that the population is divided between two groups of agents, productive and retired, which differ with respect to the degree of mobility. In the first part of the paper we study and characterize the inefficiencies that arise because of individuals' free location choice in the context of a unitary government. In the second part of the paper we consider a fiscal federalism structure and we investigate the suitable instruments that are needed in order to decentralize the optimal allocation obtained under full centralization.
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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number
702.
Length: 23 pages Date of creation: 25 Jan 2007 Date of revision: Handle: RePEc:hhs:umnees:0702
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Find related papers by JEL classification: D62 - Microeconomics - - Welfare Economics - - - Externalities H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism J10 - Labor and Demographic Economics - - Demographic Economics - - - General
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Glaeser, Edward L & Mare, David C, 2001.
"Cities and Skills,"
Journal of Labor Economics,
University of Chicago Press, vol. 19(2), pages 316-42, April.
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Other versions:
Glaeser, E.L. & Mare, D.C., 1994.
"Cities and Skills,"
Papers
e-94-11, Stanford - Hoover Institution.
Edward L. Glaeser & David C. Mare, 1994.
"Cities and Skills,"
NBER Working Papers
4728, National Bureau of Economic Research, Inc.
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