Tiebout Hypothesis and Migration-Impact of Local Fiscal Policies

Mohammed N Islam

Public Finance = Finances publiques, 1989, vol. 44, issue 3, 406-18

Abstract: A model of individual migration behavior, incorporating local government fiscal structure, is developed and estimated using 1981 Canadian census data. Estimated tax differentials and selectivity-bias corrected welfare (and income) gains are incorporated in the equation. The results provide further evidence in support of the Tiebout hypothesis. Considering only two policy variables (tax and welfare differential), the author finds that people prefer low-taxed and high welfare-spending areas, with marginal propensity to migrate varying with age. When additional migration factors are considered, people are more attracted in their locational choice by higher welfare benefits than lower property taxes.

Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:44:y:1989:i:3:p:406-18

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