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Inter-Jurisdictional Competition for Firms: Jobs as Vehicles for Redistribution

Author

Listed:
  • Robin Boadway

    () (Queen's University)

  • Katherine Cuff

    (Queen's University)

  • Nicolas Marceau

    (Universite Quebec a Montreal)

Abstract

Regions inhabited with an immobile population of disabled and able individuals compete to attract mobile firms that provide jobs. The redistributive goal of regional governments is to support the disabled, who cannot work. Able individuals may work, be involuntary unemployed because of frictions in the labour market, or choose to be voluntary unemployed. Labour force participation decisions depend on regional redistributive policies. Both the size of workforce and tax on firms affect profits and therefore, firms' location decisions. Allowing regions to engage in tax competition may be efficient. If regions cannot tax firms, they compete by implementing inefficient redistributive policies.

Suggested Citation

  • Robin Boadway & Katherine Cuff & Nicolas Marceau, 1999. "Inter-Jurisdictional Competition for Firms: Jobs as Vehicles for Redistribution," Working Papers 986, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:986
    as

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    File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_986.pdf
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    References listed on IDEAS

    as
    1. Cremer, Helmuth & et al, 1996. "Mobility and Redistribution: A Survey," Public Finance = Finances publiques, , vol. 51(3), pages 325-352.
    2. Boskin, Michael J, 1973. "Local Government Tax and Product Competition and the Optimal Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 203-210, Jan.-Feb..
    3. Drazen, Allan, 1986. "Optimal Minimum Wage Legislation," Economic Journal, Royal Economic Society, vol. 96(383), pages 774-784, September.
    4. Joseph Stiglitz, 1999. "Taxation, Public Policy, and Dynamics of Unemployment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 239-262, August.
    5. Robin Boadway & Katherine Cuff, 1999. "Monitoring Job Search as an Instrument For Targeting Transfers," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 317-337, August.
    6. Lockwood, Ben, 1999. "Inter-regional insurance," Journal of Public Economics, Elsevier, vol. 72(1), pages 1-37, April.
    7. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
    8. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    9. Boadway, Robin & Keen, Michael, 2000. "Redistribution," Handbook of Income Distribution,in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 12, pages 677-789 Elsevier.
    10. Guesnerie, Roger & Roberts, Kevin, 1987. "Minimum wage legislation as a second best policy," European Economic Review, Elsevier, vol. 31(1-2), pages 490-498.
    11. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, vol. 2(1), pages 35-58, February.
    12. Johnson, G.E. & Layard, P.R.G., 1987. "The natural rate of unemployment: Explanation and policy," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 16, pages 921-999 Elsevier.
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    Citations

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    Cited by:

    1. Marceau, Nicolas, 2008. "La concurrence entre gouvernements est-elle bénéfique?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 84(4), pages 365-390, Décembre.
    2. Boadway, Robin & Cuff, Katherine & Marceau, Nicolas, 2003. "Redistribution and employment policies with endogenous unemployment," Journal of Public Economics, Elsevier, vol. 87(11), pages 2407-2430, October.

    More about this item

    Keywords

    Inter-Jurisdictional Competition; Redistributive Policies; Unemployment;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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