Migrations, public goods and taxes

Jean Gabszewicz, Salome Gvetadze () and Skerdilajda Zanaj
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Salome Gvetadze: CREA, University of Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This paper examines how and why people migrate between two re- gions with asymmetric size. The agglomeration force comes from the scale economies in the provision of local public goods, whereas the disper- sion force comes from congestion in consumption of public goods. Public goods considered resemble club goods (or public goods with congestion) and people are heterogeneous in their migration costs. We find that the large countries can be destination of migrants for sufficiently high provision of public goods, even when the large country taxes too much. The high provision of public good offsets the congestion effect. While, the small country can be the destination of migrants for two reasons. Firstly, when public good supply is intermediate, people move to avoid congestion in the large country and to benefit from low taxation in the small one. Finally, when the provision of public goods is low, people move towards the small countries just to avoid congestion.

Keywords: Migration; public goods; congestion. (search for similar items in EconPapers)
JEL-codes: F3 H0 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-geo, nep-mig, nep-pbe and nep-pub
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http://wwwen.uni.lu/content/download/43999/508021/ ... ds%20and%20taxes.pdf (application/pdf)

Related works:
Working Paper: Migrations, public goods and taxes (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:11-13

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