Capital mobility, wage bargaining, and social insurance policies in an economic union

Abstract

economic integration, social insurance policies, capital mobility, wage bargaining, tax competition,

Who gains from capital market integration? Tax competition between unionized and non‐unionized countries

“…() showed that market integration reduces the employment subsidy in a fixed‐wage model of tax competition. Lejour and Verbon () found that unemployment benefits decrease as the mobility of capital increases in a wage‐bargaining model, and a similar result is obtained in the minimum‐wage model of Lozachmeur ().…”

“… See, for instance, Lejour and Verbon (), Fuest and Huber (), Richter and Schneider (), Boadway et al. (), Koskela and Schöb (), Lozachmeur (), Leite‐Monteiro et al.…”

Factor Taxation, Income Distribution, and Capital-Market Integration

“…We show that, in contrast to the findings by Persson and Tabellini, distributional effects may then lead to a capital tax increase in the exporting country, and to diverging rates of capital taxation. We also compare this pattern of results with some new findings in the parallel literature on tax-financed social insurance schemes (Lejour andVerbon 1996, Gabszewicz andvan Ypersele 1996) and argue that this comparison suggests a more general difference between median-voter and interest-group models in assessing the effects of increased factor market integration.…”

Factor Taxation, Income Distribution and Capital Market Integration

“…Using an interest group approach similar to the one adopted here, Verbon (1990) and Lejour and Verbon (1996) show that the level of unemployment insurance provided to risk-averse agents need not fall, in general, as a result of increased factor mobility. In the model of Lejour and Verbon the degree of risk aversion towards unemployment plays a similarly central role for the results as does the elasticity parameter p in the political support function of the present analysis.…”