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Migration with local public goods and the gains from changing places

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Hammond, Peter J., 1945- and Sempere, Jaume. (2009) Migration with local public goods and the gains from changing places. Economic Theory, Vol.41 (No.3). pp. 359-377. ISSN 0938-2259

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Official URL: http://dx.doi.org/10.1007/s00199-008-0400-6

Abstract

Without public goods and under fairly standard assumptions, in Hammond and Sempere (J Pub Econ Theory, 8: 145–170, 2006) we show that freeing migration enhances the potential Pareto gains from free trade. Here, we present a generalization allowing local public goods subject to congestion. Unlike the standard literature on fiscal externalities, our result relies on fixing both local public goods and congestion levels at their status quo values. This allows constrained efficient and potentially Pareto improving population exchanges regulated only through appropriate residence charges, which can be regarded as Pigouvian congestion taxes.

Item Type:	Journal Article
Subjects:	J Political Science > JV Colonies and colonization. Emigration and immigration. International migration H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Emigration and immigration -- Economic aspects, Public goods, Externalities (Economics), Equilibrium (Economics), Free trade
Journal or Publication Title:	Economic Theory
Publisher:	Springer
ISSN:	0938-2259
Official Date:	December 2009
Volume:	Vol.41
Number:	No.3
Number of Pages:	19
Page Range:	pp. 359-377
Identification Number:	10.1007/s00199-008-0400-6
Status:	Peer Reviewed
Access rights to Published version:	Restricted or Subscription Access
Funder:	European Commission (EC)
Grant number:	MEXC-CT-2006-041121 (EC)
References:	Arrow, K.J. and G. Debreu (1954), “Existence of Equilibrium for a Competitive Economy,” Econometrica 22, 265–290. Broome, J. (1972), “Existence of Equilibrium in Economies with Indivisible Commodities,” Journal of Economic Theory 5, 224–250. Conley, J. and M.H. Wooders (1996), “Taste-Homogeneity of Optimal Jurisdictions in a Tiebout Economy with Crowding Types and Endogenous Educational Investment Choices,” Ricerche Economiche 50, 367–387. Conley, J. and M.H. Wooders (1997) “Equivalence of the Core and Competitive Equilibrium in a Tiebout Economy with Crowding Types,” Journal of Urban Economics 41, 421–440. Hammond P.J. and J. Sempere (1995), “Limits to the Potential Gains from Market Integration and Other Supply-Side Policies,” Economic Journal 105, 1180–1204. Hammond, P.J. and J. Sempere (2006), “Gains from Trade versus Gains from Migration: What Makes Them So Different?” Journal of Public Economic Theory 8, 145–170. Hildenbrand, W. (1974), Core and Equilibria of a Large Economy (Princeton: Princeton University Press). Mas-Colell, A. (1977), “Indivisible Commodities and General Equilibrium Theory,” Journal of Economic Theory 16, 443–456.
URI:	http://wrap.warwick.ac.uk/id/eprint/2423