Distributive Policy with Labor Mobility and the Samaritan's Dilemma

28 Pages Posted: 21 Feb 2009

See all articles by Kohei Daido

Kohei Daido

Kwansei Gakuin University - School of Economics

Ken Tabata

Kobe City University of Foreign Studies - Department of Foreing Studies

Date Written: January 21, 2009

Abstract

We consider a model with two countries in which each government redistributes income between two types of individuals (the rich and the poor). This model shows that an increase in the mobility of individuals induces intensive tax competition across countries and lowers the level of redistribution undertaken by each country. However, this lower level of redistribution enhances individuals' efforts to raise his own labor income and alleviates the consequences of the Samaritan's dilemma. Welfare evaluation of economic integration should be based on the balance of these two competing effects.

Keywords: Redistribution, Samaritan's dilemma, Migration, Economic integration, Psychological attachment

JEL Classification: C72, F15, F22, H53

Suggested Citation

Daido, Kohei and Tabata, Ken, Distributive Policy with Labor Mobility and the Samaritan's Dilemma (January 21, 2009). Available at SSRN: https://ssrn.com/abstract=1330765 or http://dx.doi.org/10.2139/ssrn.1330765

Kohei Daido (Contact Author)

Kwansei Gakuin University - School of Economics ( email )

1-155 Uegahara Ichiban-cho Nishinomiya
662-8501 Hyogo
662-8501
Japan
+81-798-54-6204 (Phone)
+81-798-51-0944 (Fax)

Ken Tabata

Kobe City University of Foreign Studies - Department of Foreing Studies ( email )

9-1, Gakuenhigashimachi, Nishi-ku
Kobe 654-2187
Japan
81-78-794-8276 (Phone)

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