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Competition for Migrants in a Federation: Tax or Transfer Competition?

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  • Marko Köthenbürger

Abstract

The paper provides an equilibrium analysis of how countries compete for migrants. The type of competition (tax or transfer competition) depends on whether the competing countries have similar policy preferences. With symmetric preferences, countries compete in taxes for migrants. With asymmetric preferences, migration competition takes place in income support levels. The results are robust to the degree of mobility and to whether high-income or low-income households are mobile. The results are relevant, e.g., for federal policies that tackle inefficient migration competition and for evaluating whether a country may wish to adopt unilateral ‘migration-purchase’ policies.

Suggested Citation

  • Marko Köthenbürger, 2012. "Competition for Migrants in a Federation: Tax or Transfer Competition?," CESifo Working Paper Series 3709, CESifo.
  • Handle: RePEc:ces:ceswps:_3709
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    1. Guo, Man & Chen, Kunxian & Pan, Liqun, 2023. "Attraction or repulsion? The creation of civilized cities and the resident intention of migrants," China Economic Review, Elsevier, vol. 81(C).
    2. Nover, Justus, 2023. "Local labor markets as a taxable location factor? Evidence from a shock to foreign labor supply," ZEW Discussion Papers 23-012, ZEW - Leibniz Centre for European Economic Research.
    3. Andreas Wagener, 2016. "Evolutionary Stability in Fiscal Competition," CESifo Working Paper Series 5791, CESifo.
    4. 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.
    5. Changkeun Lee & Euijune Kim, 2017. "Mobility of Workers and Population between Old and New Capital Cities Using the Interregional Economic Model," Sustainability, MDPI, vol. 9(10), pages 1-15, October.
    6. Francis Bloch & Ünal Zenginobuz, 2015. "Oates’ decentralization theorem with imperfect household mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 353-375, June.

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    More about this item

    Keywords

    migration; redistribution; income taxation; government strategy; endogenous type of competition;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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