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Tax Implications of Relocation Across Local Work Regions in Sweden

Lidström, Ellen LU (2025) NEKP01 20251
Department of Economics
Abstract
This paper examines relocation of taxpayers during 2000 to 2021 across Swedish local work regions and its implications on the tax system. There exist 290 mu- nicipalities in Sweden, which are divided into 67 local work regions. Relocation is categorised as either relocation within or outside local work regions. Furthermore, a distinction is made between age and income groups in order to capture poten- tial differences in relocation patterns. With a Difference-in-Differences model the treatment effect of relocating in 2020 on local tax rate is derived. Findings show an increase of relocation growth within local work regions compared to outside local work regions, predominantly driven by 30 to 44 year olds and the middle- and high income... (More)
This paper examines relocation of taxpayers during 2000 to 2021 across Swedish local work regions and its implications on the tax system. There exist 290 mu- nicipalities in Sweden, which are divided into 67 local work regions. Relocation is categorised as either relocation within or outside local work regions. Furthermore, a distinction is made between age and income groups in order to capture poten- tial differences in relocation patterns. With a Difference-in-Differences model the treatment effect of relocating in 2020 on local tax rate is derived. Findings show an increase of relocation growth within local work regions compared to outside local work regions, predominantly driven by 30 to 44 year olds and the middle- and high income groups. Local tax rate changes depend on relocation within or outside work regions, where within observes reductions and outside increases. The analysis con- tributes to how the modern economy challenges the present taxation system, and discusses potential adjustments. (Less)
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author
Lidström, Ellen LU
supervisor
organization
course
NEKP01 20251
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Relocation · Work Regions · Local Tax Rate · The Swedish Welfare State · Difference-in-Differences · Taxation System
language
English
id
9195462
date added to LUP
2025-09-12 11:13:38
date last changed
2025-09-12 11:13:38
@misc{9195462,
  abstract     = {{This paper examines relocation of taxpayers during 2000 to 2021 across Swedish local work regions and its implications on the tax system. There exist 290 mu- nicipalities in Sweden, which are divided into 67 local work regions. Relocation is categorised as either relocation within or outside local work regions. Furthermore, a distinction is made between age and income groups in order to capture poten- tial differences in relocation patterns. With a Difference-in-Differences model the treatment effect of relocating in 2020 on local tax rate is derived. Findings show an increase of relocation growth within local work regions compared to outside local work regions, predominantly driven by 30 to 44 year olds and the middle- and high income groups. Local tax rate changes depend on relocation within or outside work regions, where within observes reductions and outside increases. The analysis con- tributes to how the modern economy challenges the present taxation system, and discusses potential adjustments.}},
  author       = {{Lidström, Ellen}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Tax Implications of Relocation Across Local Work Regions in Sweden}},
  year         = {{2025}},
}