Common Labor Market, Attachment and Spillovers in a Large Federation

Emilson Caputo Delfino Silva and Vander Mendes Lucas

No 48/2015, Economics and Politics Working Paper Series from Economics and Politics Research Group (EPRG), University of Brasília

Abstract: In this paper, we extend the home-attachment model to a setting with multiple (more than two) regions and consider non-cooperative policy making for provision of different types of federal public goods in the presence of a common labor market. Migration and working place choices are independent. We show that the optimal redistributive policy implemented by the central government always yields equalization of private consumption levels across regions. This result holds whether or not policy makers are able to anticipate migration responses to their policy choices. In the decentralized leadership games, regional governments make contributions at levels that fully internalize externalities.

Keywords: common labor market; home attachment; spillovers; decentralized leadership; R3; R5 (search for similar items in EconPapers)
JEL-codes: C72 D62 H23 H42 H77 H87 (search for similar items in EconPapers)
Date: 2015-04-08
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Persistent link: https://EconPapers.repec.org/RePEc:gvn:eprgwp:482015

DOI: 10.5281/zenodo.23601546

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