This paper was previously circulated as "The Welfare State and the Skill Mix of Migration: Dynamic Policy Formation. " The views expressed herein are those of the author(s) and do not necessarily reflect the views of the... more
This paper was previously circulated as "The Welfare State and the Skill Mix of Migration: Dynamic Policy Formation. " The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research, TMB Bank Plc. Ltd. or its executives. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
We re-examine a key result in the optimal UI literature that benefits should decline over time. We show that when the population is heterogeneous, Pareto-efficiency may call for multiple payment schedules, some with benefits that fall... more
We re-examine a key result in the optimal UI literature that benefits should decline over time. We show that when the population is heterogeneous, Pareto-efficiency may call for multiple payment schedules, some with benefits that fall over time and some with benefits that rise over time. JEL Classification: H2, D6
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We thank Alon Cohen for research assistance. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
An income tax is generally levied on both labor and capital. The working young bear mostly the tax on labor income, whereas the retired old, who already accumulated savings, bear the brunt of the capital tax. Therefore, there arise two... more
An income tax is generally levied on both labor and capital. The working young bear mostly the tax on labor income, whereas the retired old, who already accumulated savings, bear the brunt of the capital tax. Therefore, there arise two types of conicts in the determination of the income tax: the standard intra-generational conict between the poor and rich, and an intergenerational conict between the young and the old. The paper studies how aging a¤ects the resolution of these conicts, and the politicoeconomic forces that are of play: the changes in the voting pivots and the
scal leakages from taxpayers to transfer recipients. JEL classi
cation: H1, H2
It is often argued that tax competition may lead to a "race to the bottom". Such a race may hold indeed in the case of the pure case of factor mobility (such as capital mobility). However, in this paper we emphasize the unique... more
It is often argued that tax competition may lead to a "race to the bottom". Such a race may hold indeed in the case of the pure case of factor mobility (such as capital mobility). However, in this paper we emphasize the unique feature of labor migration, that may nullify the"race to the bottom" hypothesis. Labor migration is governed by net-of-tax factor rewards and the bene
ts that the welfare state provides. Tax rates are determined in a political economy set up which takes into account the e¤ect of taxes and migration on factor rewards and the
scal burden imposed by migration on the decisive voter. The paper models the host country stylistically as a member of the core of an economic union (i.e., a core EU welfare state member state), with tax
nanced bene
ts which is able to control the volume and the skill-composition of migration. The source country is modeled as an accession country to an economic union (i.e., through the EU enlargement treaty), with its ...
The literature on tax competition with free capital mobility cites several reasons for the race-to-the-bottom hypothesis in the sense that tax competition may yield significantly lower tax rates than tax coordination. With a fixed... more
The literature on tax competition with free capital mobility cites several reasons for the race-to-the-bottom hypothesis in the sense that tax competition may yield significantly lower tax rates than tax coordination. With a fixed (exogenously given) population that can move from one fiscal jurisdiction to another, the Tiebout paradigm suggests that tax competition among these jurisdictions yields an efficient outcome, so that there are no gains from tax coordination. The Tiebout paradigm considers the allocation of a given population among competing localities. Our model of international tax-transfer and migration competition among host countries deviates from the Tiebout paradigm in that the total population in the host countries and its skill distribution are endogenously determined through migration of various skills. As a result, competition needs not be efficient. This paper suggests that when a group of host countries faces an upward supply of immigrants, tax competition does...
In this paper we aim to address the question of whether in a society that cares about equality both across population groups and within each population group (across skills), supplementing an optimal tax and transfer system with an... more
In this paper we aim to address the question of whether in a society that cares about equality both across population groups and within each population group (across skills), supplementing an optimal tax and transfer system with an affirmative action policy would enhance social welfare. JEL Classification: H2, D6
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Since Becker’s (1960) analysis, the implications of endogenous fertility in the sense of parental altrusim towards their own children, for consumption, labor supply and household unemployment decisions have been explored extensively in... more
Since Becker’s (1960) analysis, the implications of endogenous fertility in the sense of parental altrusim towards their own children, for consumption, labor supply and household unemployment decisions have been explored extensively in the literature. The purpose of this paper is to examine the general equilibrium implications of endogenous fertility for a number of social issues of population policy. We are thus concerned with the normative rather than the positive implications of endogenous fertility. In our analysis, we adopt the simplest possible formulation: In addition to their own consumption, the number of children and the utility of each child is assumed to enter the utility function of the parents. Thus, subject to whatever economic opportunities and constraints they face, parents are assumed to maximize their own utility functions (one per couple) in making choices with respect to numbers of children and investments in them. Noncoersive tax and subsidy policies may be devised to affect these decisions; in the absence of such policies, a laissez-faire solution will generally exist. We ask first whether the laissez-faire solution will be efficient from the standpoint of the present generation, that is, whether individual choice in the absence of social intervention will lead to a Pareto-optimal solution. We next introduce the notion of an intergenerational social welfare function and ask whether laissez-faire leads to a social optimum under various criteria and, if not, what non-coercive social policies may be introduced to achieve one.
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Research Interests: Demography, Economics, Development Economics, Social Sciences, Developing Countries, and 14 morePopulation Dynamics, Adolescent, Medicine, Applied Economics, Social Welfare, Population, Child, Population Growth, Family Relations, Parents, Theoretical Models, Age Factors, Population Characteristics, and Family Characteristics
We develop a model that allows for public goods and status signaling through charitable contributions. This model provides a unified framework in which contributions are driven both by altruism and status signaling. We use this setup to... more
We develop a model that allows for public goods and status signaling through charitable contributions. This model provides a unified framework in which contributions are driven both by altruism and status signaling. We use this setup to re-examine the conventional practice of rendering a favorable tax treatment to charitable contributions.
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... Efraim Sadka. Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)... more
... Efraim Sadka. Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA) Vito Tanzi. ...
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... The Eitan Berglas School of Economics, Tel-Aviv University, Tel-Aviv, Israel, e-mail: sadka{at}post.tau.ac.il. Next Section. Abstract. Public-private partnerships (PPPs) are spreading all over the world. It may be quite plausible that... more
... The Eitan Berglas School of Economics, Tel-Aviv University, Tel-Aviv, Israel, e-mail: sadka{at}post.tau.ac.il. Next Section. Abstract. Public-private partnerships (PPPs) are spreading all over the world. It may be quite plausible that ...
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... viii List of Participants Elhanan Helpman Department of Economics Tel-Aviv University, Israel Ephraim Kleiman Department of ... University of Pennsylvania Torsten Persson Institute for International Economic Studies University of... more
... viii List of Participants Elhanan Helpman Department of Economics Tel-Aviv University, Israel Ephraim Kleiman Department of ... University of Pennsylvania Torsten Persson Institute for International Economic Studies University of Stockholm, Sweden Assaf Razin Department of ...
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... 0521561361 hardback Page 3. Contents Dedication ix HAIM BEN-SHAHAR In memory of EitanBerglas xiii ELHANAN HELPMAN Acknowledgments xvii The contributors xix Introduction 1 DAVID PINES, EFRAIM SADKA. AND ITZHAK ...