Labor Mobility and Fiscal Coordination

31 Pages Posted: 26 Jul 2000 Last revised: 8 May 2022

See all articles by Assaf Razin

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Chi-Wa Yuen

The University of Hong Kong - School of Economics and Finance

Date Written: January 1996

Abstract

Using a human capital based growth model, we show the essential role of labor mobility and cross-country tax harmonization in equalizing income levels of countries that start off from different initial income positions. Knowledge spillovers cum labor mobility are the driving forces behind the income level equalization process. In the absence of tax harmonization within an economic union, equality in income levels is not achievable. Coordination of educational subsidies necessary for the internalization of knowledge spillovers may or may not be necessary. These considerations constitute the basis for our efficient growth agenda for an economic union such as the EU.

Suggested Citation

Razin, Assaf and Yuen, Chi-Wa, Labor Mobility and Fiscal Coordination (January 1996). NBER Working Paper No. w5433, Available at SSRN: https://ssrn.com/abstract=225490

Assaf Razin (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

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Chi-Wa Yuen

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