The Efficiency of Fiscal Measures in Preventing Out Migration from North Finland

International audience In this paper we introduce a computable general equilibrium (CGE) model for the Finnish regional economy, RegFin. This multi-sector and interregional model characterizes economic activity in the regions of Lappi, Pohjois-Pohjanmaa, Kainuu, Keski-Pohjanmaa and the rest of Finla...

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Bibliographic Details
Published in:Regional Studies
Main Authors: Torma, Hannu Kalevi, Rutherford, Thomas
Other Authors: Institute for Rural Research & Training, University of Colorado Boulder
Format: Article in Journal/Newspaper
Language:English
Published: HAL CCSD 2010
Subjects:
Social Sciences & Humanities
Norway
Kainuu
North Finland
Lappi
Online Access:https://hal.archives-ouvertes.fr/hal-00588368
https://hal.archives-ouvertes.fr/hal-00588368/document
https://hal.archives-ouvertes.fr/hal-00588368/file/PEER_stage2_10.1080%252F00343400802508786.pdf
https://doi.org/10.1080/00343400802508786
Description
Summary:International audience In this paper we introduce a computable general equilibrium (CGE) model for the Finnish regional economy, RegFin. This multi-sector and interregional model characterizes economic activity in the regions of Lappi, Pohjois-Pohjanmaa, Kainuu, Keski-Pohjanmaa and the rest of Finland. Unemployment and net migration are determined endogenously within the model. We consider the macroeconomic effects of a regional policy applied to North Finland that is similar to tax reforms which have been implemented in Norway. The key feature of the policy concerns regionally differentiated tax rates. Tax incentives affect individual choices regarding both migration and employment. We also study a value-added tax reform where labour costs are exempted from the tax base. Our simulations seem to indicate that the regional differentiation of the social security payments of the employers and the value-added tax reform could be effective tools of regional policy.

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