We study a model with free migration between a rich and a poor region. Since there is congestion, the rich region has an incentive to give the poor region a transfer in order to reduce immigration. Faced with free migration, the rich region voluntarily chooses a transfer, which turns out to be...

This paper discusses how taxation may affect migration, economic efficiency and income distribution. The institutional framework is a federal system, in which local authorities are responsible for the supply of public services and the financing of these services, and where the central...

Regional productivity differences are large and provide scope for productivity-enhancing inter-regional labor mobility. Using an optimal taxation framework that combines an intensive labor supply margin with an extensive, productivity- enhancing migration margin, we explore the implications of...