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Labor Mobility and Fiscal Coordination

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  • Assaf Razin
  • Chi-Wa Yuen

Abstract

Using a human capital based growth model, we show the essential role of labor mobility and cross-country tax harmonization in equalizing income levels of countries that start off from different initial income positions. Knowledge spillovers cum labor mobility are the driving forces behind the income level equalization process. In the absence of tax harmonization within an economic union, equality in income levels is not achievable. Coordination of educational subsidies necessary for the internalization of knowledge spillovers may or may not be necessary. These considerations constitute the basis for our efficient growth agenda for an economic union such as the EU.

Suggested Citation

  • Assaf Razin & Chi-Wa Yuen, 1996. "Labor Mobility and Fiscal Coordination," NBER Working Papers 5433, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5433
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    References listed on IDEAS

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    Cited by:

    1. Agiomirgianakis, George & Zervoyianni, Athina, 2001. "Macroeconomic equilibrium with illegal immigration," Economic Modelling, Elsevier, vol. 18(2), pages 181-202, April.
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    3. Uwe Walz, 1997. "Dynamic Effects of Economic Integration: A Survey," Open Economies Review, Springer, vol. 8(3), pages 309-326, July.
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    5. Junior Davis & Dirk Bezemer, 2005. "Key emerging and conceptual issues in the development of the rural non-farm economy in developing countries and transition economies," Development and Comp Systems 0510017, University Library of Munich, Germany.

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