Migration, Commuting, and the Spatial Distribution of Public Spending

Wookun Kim ()
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Wookun Kim: Southern Methodist University

No 2305, Departmental Working Papers from Southern Methodist University, Department of Economics

Abstract: What are the welfare consequences of fiscal transfers across local governments that finance their spending? I develop a spatial equilibrium framework in which workers’ migration and commuting choices reveal preferences. I combine it with unique data from South Korea and leverage tax reforms as a source of exogenous variation. General-equilibrium counterfactuals imply that a fiscal arrangement with lower redistribution would result in aggregate gains. A key aspect of my analysis is that migration and commuting decisions are jointly made. Ignoring either of these margins biases the estimates of preferences for public goods and key elasticities in quantitative spatial models.

Keywords: local public finance; redistribution; endogenous amenities; migration; commuting; quantitative spatial model (search for similar items in EconPapers)
JEL-codes: H3 H77 J61 R12 R13 R5 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-geo, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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