Labor Mobility and Redistribution with Evolving Altruism : The Small Economy Case
This paper analyzes the issue of income redistribution in a small economy in the process of opening itself to labor migration. It assumes that only full-fledged citizens benefit from redistribution and that it takes one period for a migrant to become a citizen. The degree of redistribution measured by the level of income transfer is shown to first increase and then decrease to its steady-state value.
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