Skill Distributions and the Compatibility between Mobility and Redistribution
We study to what extend in a Tiebout economy, the exogenous distribution of skill across agents affects the compatibility between mobility an redistribution. We propose a two-region economy where: i) each region redistributive policy is elected by majority rule (where both cases: myopic and sophisticated voters are considered), and ii) each region wage is endogenously determined by a separated labor market. We find that the compatibility between mobility and redistribution can be guaranteed when either there is a low-skilled region where the median skilled agent is below the mean skill of the region, or/and when there is a high-skilled region where the median skilled agent is above the mean skill of the region.
|Date of creation:||2004|
|Date of revision:|
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CORE Discussion Papers RP
1536, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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