Efficiency Properties of Labor Taxation in a Spatial Model of Restricted Labor Mobility

Patrik Guggenberger, Ashok Kaul () and Martin Kolmar ()
Additional contact information
Ashok Kaul: Saarland University

No 287, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We examine the efficiency properties of labor taxation. A spatial model of an economy is introduced whose key feature is a new approach to restricted labor mobility. We characterize the efficient allocation of labor and properties of a decentralized equilibrium. An efficient allocation of labor can be compatible with marginal productivity differentials stemming from binding mobility restrictions. We investigate two scenarios of labor taxation (firm-specific taxes and country-specific taxes) and in both setups we give a complete characterization of the cases for which there is scope for redistribution without affecting effciency. Finally, we discuss the applicability of our model in the context of the place of employment and place of residence principle of taxation.

Keywords: Restricted Labor Mobility; Efficient Allocation of Labor; Labor Taxation (search for similar items in EconPapers)
JEL-codes: H7 J61 R5 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2001-04
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Regional Science and Urban Economics, 2002, 32 (4), 447-473

Downloads: (external link)
https://docs.iza.org/dp287.pdf (application/pdf)

Related works:
Journal Article: Efficiency properties of labor taxation in a spatial model of restricted labor mobility (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp287

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().