Migration and Redistribution: Federal Governance of an Economic Union Matters

Both the U.S. and EU are an economic union: There is a single market for goods, capital, finance, labor. That is, there free mobility of goods services, physical financial labor among member countries union. Nevertheless, much higher degree policy coordination states U.S than EU. For instance, has common (federal) income tax system which constitutes major source revenues in Similarly, social security more or less uniform across also migration set up enforced by federal government. In contrast, very little on these issues We argue using migration-based, fiscal-externality, model that potentially contribute great deal to our understanding observed differences between US as unions: generosity welfare state skill composition migration.