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Place-Based Redistribution

Author

Listed:
  • Cecile Gaubert
  • Patrick M. Kline
  • Damián Vergara
  • Danny Yagan

Abstract

We study optimal income taxation in a spatial equilibrium model with heterogeneous locational preferences, labor supply decisions, and competitive housing and labor markets. Expressions characterizing the optimal tax schedule in each community are provided that capture the fiscal externalities associated with migration and the effects of redistribution between households and landlords. Correlation between skill and locational preferences yields optimal transfers to poor areas, while sorting based on comparative advantage can motivate transfers in either direction. A calibration to areas targeted by the U.S. Empowerment Zone program yields sizable optimal spatial transfers that are sensitive to assumed levels of migration responsiveness.

Suggested Citation

  • Cecile Gaubert & Patrick M. Kline & Damián Vergara & Danny Yagan, 2021. "Place-Based Redistribution," NBER Working Papers 28337, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28337
    Note: DEV ITI LS PE
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    Cited by:

    1. Enghin Atalay & Ali Hortacsu & Mustafa Runyun & Chad Syverson & Mehmet Fatih Ulu, 2023. "Micro- and Macroeconomic Impacts of a Place-Based Industrial Policy," Working Papers 23-12, Federal Reserve Bank of Philadelphia.
    2. Hershbein, Brad & Stuart, Bryan A., 2023. "Place-based consequences of person-based transfers: Evidence from recessions," Journal of Public Economics, Elsevier, vol. 224(C).
    3. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    4. Agrawal David R. & Foremny Dirk, 2022. "Redistribution In A Globalized World," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 242(5-6), pages 551-567, December.
    5. Jung, Philip & Korfmann, Philipp & Preugschat, Edgar, 2023. "Optimal regional labor market policies," European Economic Review, Elsevier, vol. 152(C).
    6. Freedman, Matthew & Khanna, Shantanu & Neumark, David, 2023. "Combining rules and discretion in economic development policy: Evidence on the impacts of the California Competes Tax Credit," Journal of Public Economics, Elsevier, vol. 217(C).
    7. Antonia Díaz & Álvaro Jáñez & Felix Wellschmied, 2023. "Geographic Mobility Over the Life-cycle," Documentos de Trabajo del ICAE 2023-01, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    8. Blouri, Yashar & Büchler, Simon & Schöni, Olivier, 2023. "The geography of mortgage interest deductions," Journal of Urban Economics, Elsevier, vol. 138(C).
    9. Ida Farida Adi Prawira, 2021. "Phenomenology of Employee Income Tax Policies during the Covid-19 in Indonesia," GATR Journals afr199, Global Academy of Training and Research (GATR) Enterprise.
    10. Jeffrey Clemens & Stan Veuger, 2024. "Intergovernmental Grants and Policy Competition: Concepts, Institutions, and Evidence," NBER Chapters, in: Policy Responses to Tax Competition, National Bureau of Economic Research, Inc.
    11. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.
    12. Lee, Hwanoong & Ko, Changsu & Kim, Wookun, 2024. "Local employment multiplier: Evidence from relocation of public-sector entities in South Korea," Labour Economics, Elsevier, vol. 88(C).
    13. Sebastian Siegloch & Nils Wehrhöfer & Tobias Etzel, 2022. "Spillover, Efficiency and Equity Effects of Regional Firm Subsidies," ECONtribute Discussion Papers Series 210, University of Bonn and University of Cologne, Germany.
    14. Giuseppe Albanese & Guglielmo Barone & Guido DeBlasio, 2021. "The impact of place-based policies on income distribution," Discussion Paper series in Regional Science & Economic Geography 2021-04, Gran Sasso Science Institute, Social Sciences, revised Mar 2021.
    15. Yang, Xiaozhong & Zhang, Cheng, 2022. "Spatial investments in the real estate industry: Based on the population flow within the city," Journal of Business Research, Elsevier, vol. 140(C), pages 593-603.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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