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Common Labor Market, Attachment and Spillovers in a Large Federation

Author

Listed:
  • Emilson Caputo Delfino Silva
  • Vander Mendes Lucas

Abstract

In this paper, we extend the home-attachment model to a setting with multiple (more than two) regions and consider non-cooperative policy making for provision of different types of federal public goods in the presence of a common labor market. Migration and working place choices are independent. We show that the optimal redistributive policy implemented by the central government always yields equalization of private consumption levels across regions. This result holds whether or not policy makers are able to anticipate migration responses to their policy choices. In the decentralized leadership games, regional governments make contributions at levels that fully internalize externalities.

Suggested Citation

  • Emilson Caputo Delfino Silva & Vander Mendes Lucas, 2015. "Common Labor Market, Attachment and Spillovers in a Large Federation," Economics and Politics Working Paper Series 48/2015, Economics and Politics Research Group (EPRG), University of Brasília.
    • Handle: RePEc:gvn:eprgwp:482015
    DOI: 10.5281/zenodo.23601546
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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