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Last but not least, the results provide strong support for the claim that large
levels of mobility are associated with larger levels of interregional transfers.
As displayed in the right panel of Figure 8.8 , as interindustry wage elasticity
increases so does the share of the economy political unions devote to transfers
from wealthier to poorer regions. The substantive impact is noteworthy: a 1
point increase in the value of the elasticity implies an increase in interregional
redistribution equivalent to about 4% of the union's GDP. This result is con-
sistent with the evidence provided by the previous case studies, and supports
the argument that large levels of mobility lead net contributors to accept inter-
regional transfers to ensure themselves against potential disruptions of their
labor markets and welfare systems. Furthermore, the strong and direct impact
of mobility on interregional redistribution adds to the case that there are two
dimensions of redistribution with partially independent politico-economic log-
ics. The last column in Table 8.3 shows that mobility has no direct effect on
interpersonal redistribution. Instead, it conditions interpersonal redistribution
indirectly, through its impact on the geography of inequality and the level of
risk sharing between regions (as illustrated by the Canadian experience as well).
By contrast, the results in this section indicate that mobility is a very strong
predictor of interregional redistributive efforts.
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