Inter-jurisdiction migration and the fiscal policies of local governments

Dai, Darong; Jansen, Dennis W.; Liu, Liqun

doi:10.1007/s00712-020-00715-7

Cited by 5 publications

(2 citation statements)

References 20 publications

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“…We can therefore establish the following result regarding the implementation of the full-information optimum through decentralized regional debt decisions. 12 Proposition 4.1 Suppose that regional welfare is specified to be the welfare of natives. The full-information optimum is attained through decentralized regional debt decisions by setting z A = z A,F B , z B = z B,F B , an upper bound b A,F B on the public debt in region A, and an upper bound b B,F B on the public debt in region B.…”

Section: Justifying Differentiated Budget Institutionsmentioning

confidence: 99%

Optimal interregional redistribution and local borrowing rules under migration and asymmetric information

Dai

Liu

Tian

2019

J Public Economic Theory

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Assuming two types of regions that differ only in the discount rate, Huber and Runkel show that optimal federal redistribution is from impatient to patient regions, and optimal local public debt is higher in impatient regions than that in patient regions. This paper extends their analysis by allowing for interregional migrations and by considering two alternative regional goals. When the regional governments maximize their respective residents’ welfare, considering the interregional migrations does not change Huber and Runkel's analysis. When the regional governments maximize their respective natives’ welfare, incorporating migrations would reverse Huber and Runkel's conclusions when migration intensity is sufficiently high and the regional difference is sufficiently large.

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Section: Justifying Differentiated Budget Institutionsmentioning

confidence: 99%

Optimal interregional redistribution and local borrowing rules under migration and asymmetric information

Dai

Liu

Tian

2019

J Public Economic Theory

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“…First, the impact of local fiscal conditions on immigration decisions. It is included the impact of fiscal models on immigration decisions [ 3 ]; The impact of fiscal structure on immigration decisions [ 4 , 5 ]; The effect of the host’s fiscal situation on the migration outcome [ 6 ]; Using fiscal tools to attract immigrants [ 7 – 9 ], such as the use of tax policies to attract immigrants [ 9 , 10 ] and generate fiscal competition [ 11 , 12 ]; And the impact of public services on immigration [ 13 ]. Second, the impact of migration on the public finance in receiving economies [ 14 – 16 ].…”

Section: Introductionmentioning

confidence: 99%

Emigration and fiscal gap in population-exporting region

Li,

Zhang

2024

PLoS ONE

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This paper analyzes how emigration impacts fiscal gap of population-exporting region in the long term. We construct a general equilibrium model of emigration and fiscal gap and make empirical verification using two-step system GMM model. Among the major lessons from this work, five general and striking results are worth highlighting: (1) the economic losses of emigration are the immediate cause of widening the fiscal gap. (2) in the short and long term, emigration can expand the fiscal revenue gap through the superimposed effect of tax rate and tax base. (3) the gap in fiscal expenditure is widened by the outflow of people in the short term. However, local governments would change the strategy to keep the spending gap from widening in the long run. (4) a positive impact of emigration on the fiscal gap. the more severe population emigration, the larger the fiscal gap. (5) when the trend of emigration becomes irreversible, the subsequent efforts of local governments to expand fiscal expenditure for attraction population would not only fail to revive the regional economy, but aggravate the expansion of fiscal gap. The contribution of research is twofold. On the one hand, it fills the theoretical gap between emigration and fiscal gap because previous studies have paid little attention to the fiscal problems of local government of population outflow. On the other hand, the selection of Northeast China that has been subject to long-term out-of-population migration is good evidence to verify this theory, which is tested very well using the 2S-GMM model. The comprehensive discussion on the relationship between emigration and fiscal gap is helpful to guide those continuous population-exporting regions that are facing a huge fiscal gap how to solve the fiscal gap and unsustainability from the perspective of fiscal revenue and expenditure.

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