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Competition for migrants in a federation: Tax or transfer competition?

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  • Koethenbuerger, Marko

Abstract

This paper provides an analysis of competition for migrants. Competing in taxes (transfers) renders migration flows less (more) elastic with respect to changes in fiscal policy. Jurisdictions with aligned preferences (i.e. jurisdictions that maximize the interest of the same type of households, either mobile or immobile households) prefer to reduce the competitive pressure and compete in taxes. Jurisdictions with distinct preferences, on the other hand, prefer to expose themselves to more competitive pressure and compete in transfers. This paper offers insights into the optimal use and design of transfers and helps interpret existing empirical evidence.

Suggested Citation

  • Koethenbuerger, Marko, 2014. "Competition for migrants in a federation: Tax or transfer competition?," Journal of Urban Economics, Elsevier, vol. 80(C), pages 110-118.
  • Handle: RePEc:eee:juecon:v:80:y:2014:i:c:p:110-118
    DOI: 10.1016/j.jue.2013.12.001
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    Cited by:

    1. Yongzheng Liu, 2016. "Do government preferences matter for tax competition?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(2), pages 343-367, April.
    2. Yongzheng Liu, 2016. "Do government preferences matter for tax competition?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(2), pages 343-367, April.
    3. Changkeun Lee & Euijune Kim, 2017. "Mobility of Workers and Population between Old and New Capital Cities Using the Interregional Economic Model," Sustainability, MDPI, Open Access Journal, vol. 9(10), pages 1-15, October.
    4. Andreas Wagener, 2016. "Evolutionary Stability in Fiscal Competition," CESifo Working Paper Series 5791, CESifo.

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    More about this item

    Keywords

    Migration; Redistribution; Income taxation; Government strategy; Endogenous type of competition;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • F2 - International Economics - - International Factor Movements and International Business

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