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Discussion Paper Details

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Title: Migration and Tax Competition Within a Union

Author(s): Assaf Razin and Efraim Sadka

Publication Date: August 2013

Keyword(s): capital mobility, fiscal leakage and labor mobility

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

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.

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Bibliographic Reference

Razin, A and Sadka, E. 2013. 'Migration and Tax Competition Within a Union'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9600