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Geographic Mobility and Redistribution - A Macro-Economic Analysis

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  • Daniele Coen-Pirani

    (University of Pittsburgh)

Abstract

I study the effect of progressive income redistribution on human capital investment and welfare in a new dynamic model of migration. The model features an arbitrary number of labor markets and finitely-lived agents, yet it is analytically tractable. The model's key parameters are estimated using panel data on migration and wage growth from the PSID. The quantitative model is used to perform counterfactual analysis. A more progressive tax-transfer scheme is shown to reduce migration rates. This distortion to human capital investment induces the welfare-maximizing social planner to select a less progressive tax system than under exogenous geographic mobility.

Suggested Citation

  • Daniele Coen-Pirani, 2017. "Geographic Mobility and Redistribution - A Macro-Economic Analysis," 2017 Meeting Papers 1079, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1079
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    References listed on IDEAS

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