On human capital formation with exit options: comment and new results

Human capital formation, Migration, Economic volatility, F22, J24, I21,

Leviathans, federal transfers, and the cartelization hypothesis

Federal fiscal arrangements are argued to give rise to tacit collusion among competing Leviathans (Brennan and Buchanan, The Power to Tax, CUP, 1980). Though frequently encountered in academic and policy discussions, the cartelization hypothesis has rarely been scrutinized formally. This paper explores the effect of federal equalizing transfers on Leviathans engaged in tax competition. Contrary to the hypothesis, equalization is found to potentially complement tax competition in taming the Leviathan by implicitly taxing tax revenues extracted by the Leviathan. Thus, transfers might be an appropriate constitutional provision against fiscal expropriation. Copyright Springer Science + Business Media, Inc. 2005

Who cares when you close down? The effects of primary care practice closures on patients

This paper investigates the consequences that patients face when their regular general practitioner (GP) closes down her practice, typically due to retirement. We estimate the causal impact of closures on patients' utilization patterns, healthcare expenditures, hospitalizations, mortality, and health plan choices. Employing a difference-in-difference framework, we find that patients who experience a discontinuity of care persistently adjust their ambulatory utilization pattern by shifting visits away from GPs (−12%) toward specialists (+11%) and hospital outpatient facilities (+6%). In contrast, we find no evidence on adverse health effects as measured by hospitalizations and mortality. The impact on utilization is heterogeneous along several dimensions. In particular, we find geographic disparities between regions with high and low availability of primary care. We also observe that patients with chronic conditions substitute more strongly toward other providers. Our results have potential implications for health policy in at least two dimensions: first, practice closures lead to more fragmented care which may entail inefficiencies, and second, closures deteriorate access to primary care in regions with low physician density

Tax Evasion and Auditing in a Federal Economy

This paper analyzes the relation between tax auditing and fiscal equalization in the context of fiscal competition. We incorporate a model of tax evasion by firms into a standard tax competition framework where regional governments use their audit rates as a strategic instrument to engage in fiscal competition. We compare the region’s choice of audit policies for three different cases: A scenario of unconfined competition without interregional transfers, a scenario with a gross revenue equalization (GRS) scheme and finally, a scenario with net revenue sharing (NRS), where not only the revenues from taxation but also the regions auditing costs are shared. Without regional transfers, fiscal competition leads to audit rates which are inefficiently low for revenue-maximizing governments. While in general GRS aggravates the inefficiency, NRS makes the decentralized choice of auditing policies more efficient. Copyright Springer Science + Business Media, Inc. 2005tax evasion, fiscal competition, fiscal equalization, auditing,

Federal tax competition and the efficiency consequences for local taxation of revenue equalization

Federal tax competition, Fiscal externalities, Equalization grants, H41, H71, H77,