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Tax Burden and Migration: A Political Economy Perspective

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  • Efraim Sadka
  • Assaf Razin

Abstract

The extent of taxation and redistribution policy is generally determined at a political-economy equilibrium by a balance between those who gain and those who lose from a more extensive tax-transfer policy. In a stylized model of migration and human capital formation, we find, somewhat against conventional wisdom, that low-skill migration may lead to a lower tax burden and less redistribution than no migration, even though the migrants join the pro-tax coalition.

Suggested Citation

  • Efraim Sadka & Assaf Razin, 1997. "Tax Burden and Migration: A Political Economy Perspective," IMF Working Papers 1997/078, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1997/078
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    References listed on IDEAS

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    1. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-656, August.
    2. Nerlove, Marc & Razin, Assaf & Sadka, Efraim & von Weizsacker, Robert K., 1993. "Comprehensive income taxation, investments in human and physical capital, and productivity," Journal of Public Economics, Elsevier, vol. 50(3), pages 397-406, March.
    3. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(2), pages 175-208.
    4. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," American Economic Review, American Economic Association, vol. 85(2), pages 312-316, May.
    5. Saint-Paul, Gilles, 1994. "Unemployment, wage rigidity, and the returns to education," European Economic Review, Elsevier, vol. 38(3-4), pages 535-543, April.
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    Cited by:

    1. Karin Mayr, 2003. "Immigration and Majority Voting on Income Redistriubtion-Is there a Case for Opposition from Natives?," Economics working papers 2003-08, Department of Economics, Johannes Kepler University Linz, Austria.
    2. Dieter Gstach & Thomas Grandner, 2000. "Restricted immigration in a two-sector economy," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(3), pages 404-416, August.
    3. Hans-Werner Sinn, 1999. "Inflation and Welfare: Comment on Robert Lucas," NBER Working Papers 6979, National Bureau of Economic Research, Inc.
    4. Sapir, André, 2000. "Who is Afraid of Globalization? The Challenge of Domestic Adjustment in Europe and America," CEPR Discussion Papers 2595, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    WP; math; mover accent; migration quota; tax-transfer policy; equilibrium tax rate; equilibrium migration condition; income gap; low-skill migrant; Migration; Consumption; Tax incidence;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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