Poutvaara, Panu (2000): Education, mobility of labour and tax competition. In: International Tax and Public Finance, Vol. 7, No. 6: pp. 699-719 |
Abstract
We show that wage-tax financed subsidies encourage investment in riskyeducation and offer welfare gains. Tax competition and labour mobilitymay lead to substantial erosion of regional taxation. On the other hand,mobility insures against region-specific shocks encouraging investmentin education. Thus, welfare effects on the educated and the owners ofthe fixed factor may go in either direction. Tax competition isespecially fierce if the governments care about the owners of the fixedfactor. Elimination of their interests from the governments’ objectivefunctions results in a Pareto-improvement in a federation with taxcompetition.
Item Type: | Journal article |
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Faculties: | Economics Economics > Chairs > CESifo-Professorship for International Institutional Comparisons |
Subjects: | 300 Social sciences > 330 Economics |
Language: | English |
ID Code: | 19303 |
Deposited On: | 15. Apr 2014 08:49 |
Last Modified: | 04. Nov 2020 13:00 |