A dynamic mobility model of individuals between jurisdictions in a system of local governments

This paper presents a dynamic mobility model in which individuals find incentives to move from one jurisdiction to another when they can enjoy a higher utility level by doing so, and inquires about welfare implications of the final outcome of such dynamic paths. The main conclusions are summarized as follows: (i) The mobility process of individuals is globally stable in the sense that the dynamic paths converge to the steady state equilibrium as time tends to infinity. (ii) There is a possible conflict between the principles of horizontal equity and Pareto optimality in the steady state of the dynamic system.