Regions inhabited with an immobile population of disabled and able individuals compete to attract mobile firms that provide jobs. The redistributive goal of regional governments is to support the disabled, who cannot work. Able individuals may work, be involuntary unemployed because of frictions...

A two-region economy consists of a given but different number of immobile workers in each region, and a given number of mobile firms. Firms create jobs where they locate, but there is frictional unemployment. Two sorts of agglomeration effects arise: those from economies of scale in matching,...

This paper studies the role of monitoring as an instrument to improve the redistributive and insurance properties of an optimal tax-transfer system. Workers of different skills can choose to participate in job search or to become voluntarily unemployed. Labour markets exist for jobs of each...

We study federal economies in which regional governments have responsibility for delivering public services and redistributive objectives apply. The implications of these for the assignment of revenue-raising instruments and fiscal transfers, both vertical and horizontal, are considered. Models...