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Distributive policy with labor mobility and the Samaritanfs dilemma

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  • Kohei Daido

    ()
    (Kwansei Gakuin University)

  • Ken Tabata

    (Kobe City University of Foreign Studies)

Abstract

We consider a model with two countries in which each government redistributes income between two types of individuals (the rich and the poor). This model shows that an increase in the mobility of individuals induces intensive tax competition across countries and lowers the level of redistribution undertaken by each country. However, this lower level of redistribution enhances individualsf efforts to raise his own labor income and alleviates the consequences of the Samaritanfs dilemma. Welfare evaluation of economic integration should be based on the balance of these two competing effects.

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File URL: http://192.218.163.163/RePEc/pdf/kgdp44.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 44.

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Length: 28 pages
Date of creation: Jan 2009
Date of revision: Jan 2009
Handle: RePEc:kgu:wpaper:44

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Keywords: Redistribution; Samaritanfs; dilemma; Migration; Economic; integration; Psychological attachment;

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