Most cities enjoy some autonomy over how they tax their residents, and that autonomy is typically exercised by multiple municipal governments within a given city. In this chapter, we document patterns of city-level taxation across countries, and we review the literature on a number of salient...

When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this...

Redistributive grants schemes, such as fiscal equalization, are a common characteristic of local public finance in several countries. However, large and small jurisdictions are treated differently by the respective fiscal equalization schemes that often tend to favour larger jurisdictions. This...

State borders create a discontinuous tax treatment of retail sales. In a Nash game, local tax rates will be higher on the low-state-tax side of a border. Local taxes will decrease from the nearest high-tax border and increase from the low-tax border. Using driving time from state borders and all...

Despite the widespread provision of retiree health insurance for public sector workers, little attention has been paid to its effects on employee retirement. This is in contrast to the large literature on health-insurance-induced “job-lock” in the private sector. I use the introduction of...

Early retirement incentives (ERIs) are increasingly prevalent in education as districts seek to close budget gaps by replacing expensive experienced teachers with lower-cost newer teachers. Combined with the aging of the teacher workforce, these ERIs are likely to change the composition of...

We investigate the determinants of the education gender gap in Italy in historical perspective with a focus on the influence of family structure. We capture the latter with two indicators: residential habits (nuclear vs. complex families) and inheritance rules (partition vs. primogeniture)....

Rather than about absolute payoffs, governments in fiscal competition often seem to care about their performance relative to other governments. Moreover, they often appear to mimic policies observed elsewhere. We study such behaviour in a tax competition game with mobile capital à la...

By the 2008/09 school year the federal state of North Rhine-Westphalia (Germany) abolished binding school catchment areas (SCAs) in all municipalities. The reform has been controversial and it was feared that school choice would increase ethnic segregation. Using data on all primary schools, we...

In January 2005 the German Supreme Court permitted the state governments to charge tuition fees. By exploiting the natural experiment, we examine how government ideology influenced the introduction of tuition fees. The results show that rightwing governments were active in introducing tuition...