The efficiency of fiscal measures in preventing out migration from North Finland

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 ne...

Full description

Bibliographic Details
Published in:Regional Studies
Main Authors: Törmä, Hannu, Rutherford, Thomas F.
Format: Article in Journal/Newspaper
Language:unknown
Published: GBR 2012
Subjects:
Wirtschaft
Städtebau
Raumplanung
Landschaftsgestaltung
Landscaping and area planning
Economics
payroll taxation
value-added taxation
Computable General Equilibrium (CGE) modelling
RegFin regional model
Area Development Planning
Regional Research
Labor Market Research
Public Finance
Arbeitsmarktforschung
Öffentliche Finanzen und Finanzwissenschaft
Raumplanung und Regionalforschung
Kainuu
Norway
North Finland
Lappi
Online Access:http://www.ssoar.info/ssoar/handle/document/24645
http://nbn-resolving.org/urn:nbn:de:0168-ssoar-246455
https://doi.org/10.1080/00343400802508786
Description
Summary: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.

Similar Items