Factor Mobility and Redistribution
1Also affiliated at GREMAQ and IDEI
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.