This paper investigates the effects of internal migration in developed countries on widening wage inequality and high unemployment, and it addresses the geographical dimension of both problems. A two-region dynamic model is developed, which accounts for the skill composition of recent internal...

We characterize the optimal tax policy and quality of day care services in an OLG model in which child care arrangements chosen by parents of different skill types affect the probability that children become high-skilled adults in a type-specific way. With respect to previous contributions,...