University of Calgary
Jump to Headline
Jump to Navigation
Jump to Content
Jump to Footer
RSS
Facebook
Twitter
Home
Prospective Students
Current Students
Alumni
Community
Faculty & Staff
Search UofC:
IT
HR
My U of C
Contacts
Department of Economics
Site Navigation
Back to Economics
Courses
People
Edit Working Paper
General Details
Title:
*
WP Number:
2013-28
Abstract:
Fiscal transfers between regions exist within many countries. Explicit transfers, such as Canada's equalization program, redistribute funds directly. Countless federal revenue and spending programs do so indirectly. Like capital flows between countries, such transfers interact with trade and affect the distribution of economic activity within and between subnational jurisdictions. Previous research has largely abstracted from trade considerations; we fill this gap. With the aid of a rich quantitative model and detailed data on within-country trade and financial flows, we uncover important effects of fiscal transfers on provincial income, migration, and national GDP in Canada. The effects are large. Transfers lower Alberta's real income by over 8 per cent and its population by over 12 per cent, and increase PEI's real income by 30 per cent and its population by 50 per cent. As employment shifts to lower productivity regions, we find transfers shrink Canada's real GDP by 0.8 per cent and income-sensitive transfers do so by as much as 1.2 per cent — equal to $19-28 billion today. Finally, fiscal transfers affect the size and distribution of gains from internal trade liberalization and spread gains across all regions, even if policy (like the New West Partnership) liberalizes trade only among some.
Length:
JEL Classification:
Keywords:
Date(s)
Created:
Format: 2024/05/02
Last updated:
Format: 2024/05/02
Author
Weight
-26
-25
-24
-23
-22
-21
-20
-19
-18
-17
-16
-15
-14
-13
-12
-11
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Published as:
If the publication is published using an alternate name enter it here
-26
-25
-24
-23
-22
-21
-20
-19
-18
-17
-16
-15
-14
-13
-12
-11
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Published as:
If the publication is published using an alternate name enter it here
Loading...
Current Document:
tombe_winter_2019.pdf
Upload File:
Cancel
top