Resource title

Fiscal Competition, Capital-Skill Complementarity, and the Composition of Public Spending

Resource image

image for OpenScout resource :: Fiscal Competition, Capital-Skill Complementarity, and the Composition of Public Spending

Resource description

Following Keen and Marchand (1997), the paper analyses the effect of fiscal competition on the composition of public spending in a model where capital and skilled workers are mobile while low skilled workers are immobile. Taxes are levied on capital and labour. Each group of workers benefits from a different kind of public good. Mobility of skilled workers provides an incentive for jurisdictions to spend ?too much? on public goods benefitting the skilled and ?too little? on those benefitting low skilled workers. In the case of capital-skill complementarity, this incentive is strengthened. The analysis is then extended to allow for mobility of unskilled labour.

Resource author

Rainald Borck

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18355

Resource license

Adapt according to the presented license agreement and reference the original author.