IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/9600.html
   My bibliography  Save this paper

Migration and Tax Competition Within a Union

Author

Listed:
  • Razin, Assaf
  • Sadka, Efraim

Abstract

We develop a stylized EU-type model of a union consisting of rich, capital-abundant and productive, countries, and poor,capital-scarce and low productivity, countries, in order to explain key features of tax policies and inter- and intra-migration flows. Our purpose is to explain the differences in the tax rates and the generosity of the welfare state, on the one hand, and migration flows, on the other hand, between rich and poor countries, within the union, and migration flows from the rest of the world. We identify a fiscal externality which makes the tax competition and the tax coordination regime to be different one from the other.

Suggested Citation

  • Razin, Assaf & Sadka, Efraim, 2013. "Migration and Tax Competition Within a Union," CEPR Discussion Papers 9600, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9600
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP9600
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charles E. McLure, Jr., 2008. "Harmonizing Corporate Income Taxes in the European Community: Rationale and Implications," NBER Chapters, in: Tax Policy and the Economy, Volume 22, pages 151-195, National Bureau of Economic Research, Inc.
    2. Razin,Assaf & Sadka,Efraim, 2001. "Labor, Capital, and Finance," Cambridge Books, Cambridge University Press, number 9780521785570.
    3. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2010. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 1-41, March.
    4. Assaf Razin & Efraim Sadka, 2010. "Fiscal and Migration Competition," NBER Working Papers 16224, National Bureau of Economic Research, Inc.
    5. Ortega, Francesc, 2005. "Immigration quotas and skill upgrading," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1841-1863, September.
    6. Gordon H. Hanson & Kenneth Scheve & Matthew J. Slaughter, 2007. "Public Finance And Individual Preferences Over Globalization Strategies," Economics and Politics, Wiley Blackwell, vol. 19(1), pages 1-33, March.
    7. Alexander Kemnitz, 2002. "On the Political Economy of Low Skilled Immigration and the Welfare State," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 423-434, August.
    8. Rosanne Altshuler & Timothy J. Goodspeed, 2015. "Follow the Leader? Evidence on European and US Tax Competition," Public Finance Review, , vol. 43(4), pages 485-504, July.
    9. Hainmueller, Jens & Hiscox, Michael J., 2010. "Attitudes toward Highly Skilled and Low-skilled Immigration: Evidence from a Survey Experiment," American Political Science Review, Cambridge University Press, vol. 104(1), pages 61-84, February.
    10. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    11. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 203-230, June.
    12. Mendoza, Enrique G. & Tesar, Linda L., 2005. "Why hasn't tax competition triggered a race to the bottom? Some quantitative lessons from the EU," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 163-204, January.
    13. Bhagwati, Jagdish & Hanson, Gordon H (ed.), 2009. "Skilled Immigration Today: Prospects, Problems, and Policies," OUP Catalogue, Oxford University Press, number 9780195382433.
    14. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
    15. Razin, Assaf & Sadka, Efraim & Suwankiri, Benjarong, 2011. "Migration and the Welfare State: Political-Economy Policy Formation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016109, April.
    16. Jan K. Brueckner, 2003. "Strategic Interaction Among Governments: An Overview of Empirical Studies," International Regional Science Review, , vol. 26(2), pages 175-188, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Olena V. Sokolovska, 2016. "Race to the bottom in international tax competition: some conceptual issues," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 2(2), pages 98-110.
    2. Soojin Kim, 2014. "The Effects of Labor Migration on Optimal Taxation: An International Tax Competition Analysis," 2014 Meeting Papers 508, Society for Economic Dynamics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Assaf Razin & Efraim Sadka, 2013. "Migration and Fiscal Competition within a Union," NBER Working Papers 19282, National Bureau of Economic Research, Inc.
    2. Assaf Razin, 2013. "MIGRATION into the WELFARE STATE: tax and migration competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 548-563, August.
    3. Chirinko, Robert S. & Wilson, Daniel J., 2017. "Tax competition among U.S. states: Racing to the bottom or riding on a seesaw?," Journal of Public Economics, Elsevier, vol. 155(C), pages 147-163.
    4. Baskaran, Thushyanthan & Lopes da Fonseca, Mariana, 2013. "The economics and empirics of tax competition: A survey," University of Göttingen Working Papers in Economics 163, University of Goettingen, Department of Economics.
    5. Sandy Fréret & Denis Maguain, 2017. "The effects of agglomeration on tax competition: evidence from a two-regime spatial panel model on French data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1100-1140, December.
    6. Levinson, Arik, 2003. "Environmental Regulatory Competition: A Status Report and Some New Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(1), pages 91-106, March.
    7. Maria Elkhdari (a), Samira Oukarfi (b), Samir Zine El Alaoui (b) and Youness Sahibi (c), 2021. "Are Strategic Interactions between Moroccan Local Governments Geographical or Political?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 46(1), pages 33-52, March.
    8. Lars P. Feld, 2006. "Regulatory Competition and Federalism in Switzerland: Diffusion by Horizontal and Vertical Interaction," CREMA Working Paper Series 2006-22, Center for Research in Economics, Management and the Arts (CREMA).
    9. Millimet, Daniel L. & Rangaprasad, Vasudha, 2007. "Strategic competition amongst public schools," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 199-219, March.
    10. Matthieu Leprince & Thierry Madiès & Sonia Paty, 2007. "Business Tax Interactions Among Local Governments: An Empirical Analysis Of The French Case," Journal of Regional Science, Wiley Blackwell, vol. 47(3), pages 603-621, August.
    11. Lyytikäinen, Teemu, 2012. "Tax competition among local governments: Evidence from a property tax reform in Finland," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 584-595.
    12. Kevin Willardsen, 2021. "Measuring fiscal interactions in local federalism: Evidence from Florida," Papers in Regional Science, Wiley Blackwell, vol. 100(4), pages 891-923, August.
    13. Hakim Hammadou & Sonia Paty & Maria Savona, 2012. "Strategic interactions in public R&D across EU-15 countries: A spatial econometric analysis," LEM Papers Series 2012/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    14. Dechun Liu & Xinye Zheng & Yihua Yu, 2022. "Public Debt Competition in Local China: Evidence and Mechanism of Spatial Interactions," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(S2), pages 91-105, November.
    15. Assaf Razin & Efraim Sadka, 2010. "Fiscal and Migration Competition," CESifo Working Paper Series 3075, CESifo.
    16. Wang, Jian & Wu, Qun & Yan, Siqi & Guo, Guancheng & Peng, Shangui, 2020. "China’s local governments breaking the land use planning quota: A strategic interaction perspective," Land Use Policy, Elsevier, vol. 92(C).
    17. Brian Knight & Nathan Schiff, 2012. "Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries," American Economic Journal: Economic Policy, American Economic Association, vol. 4(4), pages 199-229, November.
    18. Bordignon, Massimo & Cerniglia, Floriana & Revelli, Federico, 2003. "In search of yardstick competition: a spatial analysis of Italian municipality property tax setting," Journal of Urban Economics, Elsevier, vol. 54(2), pages 199-217, September.
    19. Ruiz, Fernando & Gerard, Marcel, 2008. "Is there evidence of strategic corporate tax interaction among EU countries?," MPRA Paper 10094, University Library of Munich, Germany.
    20. J. Sebastian Leguizamon & Casto Martin Montero Kuscevic, 2019. "Party Cues, Political Trends, And Fiscal Interactions In The United States," Contemporary Economic Policy, Western Economic Association International, vol. 37(4), pages 600-620, October.

    More about this item

    Keywords

    Capital mobility; Fiscal leakage; Labor mobility;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:9600. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.