Chapter 57

Factor Mobility and Redistribution

Helmuth Cremer     University of Toulouse, Toulouse, France.

1Also affiliated at GREMAQ and IDEI

Pierre Pestieau     CREPP, University of Liège, Liège, Belgium.

2Also affiliated at CORE, CEPR and Delta

JEL classification: H21, H23, H71, H77, R13, R51


This chapter reviews recent theoretical work on the effect of factor mobility and the ensuing tax competition on the capacity of governments to raise revenue and redistribute income. It focuses on three issues: the relevance and limitations of the “race to the bottom” result, the benefits and pitfalls of partial coordination and the incidence of factors mobility on social security systems.

Keywords ...

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