Mobility and tax competition when wages are endogenously determined

Woojin Lee

doi:10.1016/j.econlet.2003.11.012

Mobility and tax competition when wages are endogenously determined

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Abstract

We study a model of tax competition where both skilled and unskilled workers are mobile and wages of workers are endogenously determined. When the demand for skilled labor is sufficiently elastic, the equilibrium tax rate is decreasing in the degree of mobility of unskilled workers; otherwise the former is increasing in the latter.

Original language	English
Pages (from-to)	347-353
Number of pages	7
Journal	Economics Letters
Volume	83
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2003.11.012
Publication status	Published - 2004 Jun
Externally published	Yes

Keywords

Fiscal externality
Mobility
Redistribution
Tax competition

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2003.11.012

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abstract = "We study a model of tax competition where both skilled and unskilled workers are mobile and wages of workers are endogenously determined. When the demand for skilled labor is sufficiently elastic, the equilibrium tax rate is decreasing in the degree of mobility of unskilled workers; otherwise the former is increasing in the latter.",

keywords = "Fiscal externality, Mobility, Redistribution, Tax competition",

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KW - Redistribution

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Mobility and tax competition when wages are endogenously determined

Abstract

Keywords

ASJC Scopus subject areas

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