Local Income Taxation and Migration: Estimating the Effect of Local Income Tax Rates on Migration in a Tiebout Setting
(2014) NEKN01 20141Department of Economics
- Abstract (Swedish)
- This study examines the impact of local income taxation on migration by using the Tiebout hypothesis. By studying the municipalities in the old Malmöhus region during 1992-2012 it is found that the level of a local income tax rate does not deter migrants, while a high tax rate relative to the average in the area does. The study identifies that the tax rate of neighbouring municipalities affects migration. Smaller municipalities are negatively affected by an increase in the tax rate of a larger neighbour. The results suggest that smaller municipalities are more sensitive to tax competition. The impact of local expenditures is less conclusive. By modifying the specification from expenditures per capita to per user, the results from the tobit... (More)
- This study examines the impact of local income taxation on migration by using the Tiebout hypothesis. By studying the municipalities in the old Malmöhus region during 1992-2012 it is found that the level of a local income tax rate does not deter migrants, while a high tax rate relative to the average in the area does. The study identifies that the tax rate of neighbouring municipalities affects migration. Smaller municipalities are negatively affected by an increase in the tax rate of a larger neighbour. The results suggest that smaller municipalities are more sensitive to tax competition. The impact of local expenditures is less conclusive. By modifying the specification from expenditures per capita to per user, the results from the tobit estimation show that local expenditures on child care do have a positive impact on migration, which confirms earlier findings. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4456960
- author
- Ingelström, Jenny LU
- supervisor
-
- Åsa Hansson LU
- organization
- course
- NEKN01 20141
- year
- 2014
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Tiebout, local income taxation, local public goods, migration, municipality
- language
- English
- id
- 4456960
- date added to LUP
- 2014-06-23 10:43:49
- date last changed
- 2014-06-23 10:43:49
@misc{4456960, abstract = {{This study examines the impact of local income taxation on migration by using the Tiebout hypothesis. By studying the municipalities in the old Malmöhus region during 1992-2012 it is found that the level of a local income tax rate does not deter migrants, while a high tax rate relative to the average in the area does. The study identifies that the tax rate of neighbouring municipalities affects migration. Smaller municipalities are negatively affected by an increase in the tax rate of a larger neighbour. The results suggest that smaller municipalities are more sensitive to tax competition. The impact of local expenditures is less conclusive. By modifying the specification from expenditures per capita to per user, the results from the tobit estimation show that local expenditures on child care do have a positive impact on migration, which confirms earlier findings.}}, author = {{Ingelström, Jenny}}, language = {{eng}}, note = {{Student Paper}}, title = {{Local Income Taxation and Migration: Estimating the Effect of Local Income Tax Rates on Migration in a Tiebout Setting}}, year = {{2014}}, }