Should I Stay or Should I Go? The Impact of Taxation on Canadian Inter-Provincial Migration

Adam Lavecchia, Robert McKercher and Alisa Tazhitdinova

Department of Economics Working Papers from McMaster University

Abstract: This paper estimates the causal effect of income taxation on inter-provincial migration in Canada. We exploit a major tax decentralization reform between 1998-2001 that led to some provinces lowering their marginal and average tax rates more than others, particularly for top earners. Using a difference-in-differences design, we estimate a population stock-elasticity with respect to the net-of-average-tax rate of about 2.5-3 for young, unmarried high-income individuals. The estimates for older and married individuals are smaller and mostly statistically insignificant. We find that the population stock elasticity estimates are driven by a reduction the likelihood that young, unmarried and high-income individuals emigrate from their province of residence (i.e. out-migration) rather than a change to in-migration. This suggests that individuals react more strongly to tax changes in their home province rather than tax changes in other provinces.

Keywords: migration; taxation; within-country mobility (search for similar items in EconPapers)
JEL-codes: H2 H21 H24 H26 H71 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2026-04
New Economics Papers: this item is included in nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://socialsciences.mcmaster.ca/econ/rsrch/papers/archive/2026-03.pdf (application/pdf)

Related works:
Working Paper: Should I Stay or Should I Go? The Impact of Taxation on Canadian Inter-Provincial Migration (2026)
Working Paper: Should I Stay or Should I Go? The Impact of Taxation on Canadian Inter-Provincial Migration (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2026-03

Access Statistics for this paper

More papers in Department of Economics Working Papers from McMaster University Contact information at EDIRC.
Bibliographic data for series maintained by ().