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Capital mobility, imperfect labour markets, and the provision of public goods

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  • Pauser, Johannes

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

Abstract

"This paper examines equilibrium tax rates and provision levels of public goods in an international tax competition setting with imperfect labour markets. While earlier research mainly reexamined the result of underprovision of public consumption goods in the decentralised equilibrium, this paper focuses also on the provision of public intermediate goods with different sets of policy instruments available for governments, including a labour tax. In the tax game assuming symmetric jurisdictions, public inputs may also be overprovided if unemployment is caused by a fixed wage above the competitive wage rate. In detail, overprovision of public inputs may occur if governments have a head tax only, or head and capital taxes at disposal. Using comparative static analysis, the paper investigates further the sources of the differences between governmental provision of public consumption goods and public inputs." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Pauser, Johannes, 2013. "Capital mobility, imperfect labour markets, and the provision of public goods," IAB Discussion Paper 201309, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:201309
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    References listed on IDEAS

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    1. Wolfgang Eggert & Laszlo Goerke, "undated". "Fiscal Policy, Economic Integration and Unemployment," EPRU Working Paper Series 02-05, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    2. Matsumoto, Mutsumi, 2000. "A Tax Competition Analysis of Congestible Public Inputs," Journal of Urban Economics, Elsevier, vol. 48(2), pages 242-259, September.
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    4. Manuel Leite-Monteiro & Maurice Marchand & Pierre Pestieau, 2003. "Employment Subsidy with Capital Mobility," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 327-344, April.
    5. Clemens Fuest & Bernd Huber, 1999. "Tax Coordination and Unemployment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(1), pages 7-26, February.
    6. Wolfram Richter & Kerstin Schneider, 2001. "Taxing Mobile Capital with Labor Market Imperfections," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(3), pages 245-262, May.
    7. Sabine Klinger & Enzo Weber, 2016. "Decomposing Beveridge Curve Dynamics By Correlated Unobserved Components," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 877-894, December.
    8. Johann Fuchs & Enzo Weber, 2013. "A new look at the discouragement and the added worker hypotheses: applying a trend--cycle decomposition to unemployment," Applied Economics Letters, Taylor & Francis Journals, vol. 20(15), pages 1374-1378, October.
    9. Aronsson, Thomas & Wehke, Sven, 2008. "Public goods, unemployment and policy coordination," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 285-298, May.
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    11. Stefan Boeters & Kerstin Schneider, 1999. "Government versus Union. The Structure of Optimal Taxation in a Unionized Labor Market," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 174-174, June.
    12. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
    13. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
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    16. Michael Stops, 2014. "Job matching across occupational labour markets," Oxford Economic Papers, Oxford University Press, vol. 66(4), pages 940-958.
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    Citations

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    Cited by:

    1. Christian Hutter & Enzo Weber, 2015. "Constructing a new leading indicator for unemployment from a survey among German employment agencies," Applied Economics, Taylor & Francis Journals, vol. 47(33), pages 3540-3558, July.
    2. Schwengler, Barbara, 2013. "Einfluss der europäischen Regionalpolitik auf die deutsche Regionalförderung," IAB Discussion Paper 201318, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Werner, Daniel, 2013. "New insights into the development of regional unemployment disparities," IAB Discussion Paper 201311, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Drechsler, Jörg & Kiesl, Hans, 2014. "Beat the heap - an imputation strategy for valid inferences from rounded income data," IAB Discussion Paper 201402, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Gillet, Holger & Pauser, Johannes, 2014. "Efficiency in public input provision in two asymmetric jurisdictions with imperfect labour markets," IAB Discussion Paper 201411, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Bauer, Angela & Kruppe, Thomas, 2013. "Policy Styles : zur Genese des Politikstilkonzepts und dessen Einbindung in Evaluationsstudien," IAB Discussion Paper 201322, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Bossler, Mario, 2013. "Recruiting abroad: the role of foreign affinity and labour market scarcity," IAB Discussion Paper 201319, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Weber, Enzo & Zika, Gerd, 2013. "Labour market forecasting : is disaggregation useful?," IAB Discussion Paper 201314, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

    More about this item

    Keywords

    Kapitalmobilität; öffentliches Gut; Steuerpolitik; internationaler Wettbewerb; Auslandsinvestitionen; Marktunvollkommenheit; Arbeitsmarkt; Gebietskörperschaften; Lohnsteuer; Einkommensteuer; Arbeitslosigkeit; Besteuerung; Steuerbelastung; Lohnhöhe; Beschäftigungseffekte;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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