Social insurance and the completion of the internal market

A.M. Lejour

Research output: Working paperDiscussion paperOther research output

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Abstract

With the completion of the internal market in the EU pressures may arise to diminish social insurance budgets. In a two-country model with an (imperfectly) integrated consumer goods market it is shown that competitive member states use the social insurance tax rate as an instrument to tax consumers abroad which buy imported goods or to improve employment and competitiveness of home-based firms. As a result, there is tax competition. If the number of firms is fixed, social insurance levels will be inefficiently high. If there is free entry and exit social insurance levels could be inefficiently low. This could be prevented by coordination of social insurance policies. In addition, it is shown that reductions of trade barriers have a downward effect on the size of social insurance budgets in the long run.
Original languageEnglish
PublisherUnknown Publisher
Number of pages29
Volume1995-61
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-61

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Internal market
Social insurance
Free entry
Entry and exit
Tax rate
Two-country model
Tax
Tax competition
Trade barriers
Competitiveness
Integrated

Keywords

  • Social Security
  • Taxation
  • Economic Integration
  • welfare economics

Cite this

Lejour, A. M. (1995). Social insurance and the completion of the internal market. (CentER Discussion Paper; Vol. 1995-61). Unknown Publisher.
Lejour, A.M. / Social insurance and the completion of the internal market. Unknown Publisher, 1995. (CentER Discussion Paper).
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Lejour, AM 1995 'Social insurance and the completion of the internal market' CentER Discussion Paper, vol. 1995-61, Unknown Publisher.

Social insurance and the completion of the internal market. / Lejour, A.M.

Unknown Publisher, 1995. (CentER Discussion Paper; Vol. 1995-61).

Research output: Working paperDiscussion paperOther research output

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KW - Economic Integration

KW - welfare economics

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Lejour AM. Social insurance and the completion of the internal market. Unknown Publisher. 1995. (CentER Discussion Paper).