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Where should the elderly live and who should pay for their care?
Umeå University, Faculty of Social Sciences, Department of Economics.
Uppsala Center for Fiscal Studies, Uppsala University, Uppsala, Sweden .
University of Milan, Milan, Italy.
2010 (English)In: Scandinavian Journal of Economics, ISSN 0347-0520, E-ISSN 1467-9442, Vol. 112, no 2, 289-314 p.Article in journal (Refereed) Published
Abstract [en]

We consider a model with a population consisting of earners and retired persons; elderlycare is publicly provided. There is one big city, where congestion effects and agglomerationforces are at work, and a number of small villages. We show how the externalities related topopulation mobility lead to an inefficient spatial distribution of earners and retirees, and wecharacterize the second-best solution. Decentralization of this solution in a fiscal federalismstructure requires the use of taxes and subsidies proportional to the number of earners andretired persons living in the city and the villages.

Place, publisher, year, edition, pages
John Wiley & Sons, 2010. Vol. 112, no 2, 289-314 p.
Keyword [en]
Household mobility, congestion effects, agglomeration effects, fiscal federalism, grants
National Category
Research subject
URN: urn:nbn:se:umu:diva-26820DOI: 10.1111/j.1467-9442.2010.01601.xISI: 000278112600004OAI: diva2:274232
Available from: 2009-10-27 Created: 2009-10-27 Last updated: 2012-08-28Bibliographically approved

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