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Social Security and Taxation of Labour Subject to Subsidiarity and Freedom of Movement

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Author Info

  • Richter, Wolfram F.

    ()
    (TU Dortmund)

Abstract

In Europe, the competence for social security and the right to levy income tax lie with the country of employment in cross-border matters. This has two disadvantages. First, the Employment Principle distorts active persons' choice of place of work. Second, the employment-based regulation of state competencies cannot be applied to non-active persons. The Treaty of Maastricht, however, confers the right of free movement to all citizens of the Union. Against this background, this paper pleads for a reform in European policy coordination. The Employment Principle should be replaced with the Principle of Delayed Integration where cross-border matters are concerned.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 490.

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Length: 27 pages
Date of creation: May 2002
Date of revision:
Publication status: published in: Swedish Economic Policy Review, 2002 (9), 47-74
Handle: RePEc:iza:izadps:dp490

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Related research

Keywords: free movement; Social security and taxation of mobile labour; Delayed Integration; Employment Principle; Origin Principle;

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References

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  1. Wolfram F. Richter, 2001. "Delayed Integration of Mobile Labor: A Principle for Coordinating Taxation, Social Security, and Social Assistance," CESifo Working Paper Series 624, CESifo Group Munich.
  2. Hansen, Jörgen & Lofstrom, Magnus, 2001. "The Dynamics of Immigrant Welfare and Labor Market Behavior," IZA Discussion Papers 360, Institute for the Study of Labor (IZA).
  3. George J. Borjas, 1998. "Immigration and Welfare Magnets," NBER Working Papers 6813, National Bureau of Economic Research, Inc.
  4. Sinn, Hans-Werner, 1993. "How Much Europe? Subsidiarity, Centralization and Fiscal Competition," CEPR Discussion Papers, C.E.P.R. Discussion Papers 834, C.E.P.R. Discussion Papers.
  5. Fredriksson, Peter, 1999. "The Dynamics of Regional Labor Markets and Active Labor Market Policy: Swedish Evidence," Oxford Economic Papers, Oxford University Press, vol. 51(4), pages 623-48, October.
  6. David E. Wildasin, 2000. "Factor mobility and fiscal policy in the EU: policy issues and analytical approaches," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 15(31), pages 337-378, October.
  7. Lars P. Feld, 2000. "Fiskalischer Wettbewerb und Einkommensumverteilung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 1(2), pages 181-198, 05.
  8. Feld, Lars P. & Kirchgassner, Gebhard, 2001. "Income tax competition at the State and Local Level in Switzerland," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 31(2-3), pages 181-213, April.
  9. Bonin, Holger, 2001. "Fiskalische Effekte der Zuwanderung nach Deutschland - Eine Generationenbilanz," IZA Discussion Papers 305, Institute for the Study of Labor (IZA).
  10. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Report No. 3: Assessment of Possible Migration Pressure and its Labour Market Impact Following EU Enlargement to Central and Eastern Europe," IZA Research Reports 3, Institute for the Study of Labor (IZA).
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  12. Feld, Lars P, 2000. " Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, Springer, vol. 105(1-2), pages 125-64, October.
  13. Wellisch,Dietmar, 2000. "Theory of Public Finance in a Federal State," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521630351.
  14. Alan Krueger, 1999. "From Bismarck to Maastricht: The March to European Union and the Labor Compact," Working Papers 803, Princeton University, Department of Economics, Industrial Relations Section..
  15. Herbert Brücker & Parvati Trübswetter & Christian Weise, 2000. "EU-Osterweiterung: keine massive Zuwanderung zu erwarten," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 67(21), pages 315-326.
  16. Torun Österberg & Björn Gustafsson, 2001. "Immigrants and the public sector budget - accounting exercises for Sweden," Journal of Population Economics, Springer, Springer, vol. 14(4), pages 689-708.
  17. Feld, Lars P, 2000. "Steuerwettbewerb und seine Auswirkungen auf Allokation und Distribution," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 10, number urn:isbn:9783161473852, July.
  18. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, Elsevier, vol. 2(1), pages 35-58, February.
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  20. Hans-Werner Sinn & Gebhard Flaig & Martin Werding & Sonja Munz & Nicola Düll & Herbert Hofmann, 2001. "EU-Erweiterung und Arbeitskräftemigration : Wege zu einer schrittweisen Annäherung der Arbeitsmärkte," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, number 2, 8.
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Citations

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Cited by:
  1. Panu Poutvaara, 2004. "Educating Europe," CESifo Working Paper Series 1114, CESifo Group Munich.
  2. Poutvaara, Panu, 2007. "Social security incentives, human capital investment and mobility of labor," Munich Reprints in Economics, University of Munich, Department of Economics 19804, University of Munich, Department of Economics.
  3. Sinn, Hans-Werner & Ochel, Wolfgang, 2003. "Social Union, Convergence and Migration," Munich Reprints in Economics, University of Munich, Department of Economics 948, University of Munich, Department of Economics.
  4. Poutvaara, Panu, 2005. "Public education in an integrated Europe: Studying to migrate and teaching to stay?," ZEI Working Papers B 03-2005, ZEI - Center for European Integration Studies, University of Bonn.
  5. Richter, Wolfram F., 2004. "Delaying integration of immigrant labor for the purpose of taxation," Journal of Urban Economics, Elsevier, vol. 55(3), pages 597-613, May.
  6. Silke Uebelmesser, 2003. "Harmonisation of Old-Age Security Within the European Union," CESifo Working Paper Series 1108, CESifo Group Munich.

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