Population growth and taxes: the effect of regional differences in the Spanish inheritance tax

Rafael González-Val and Miriam Marcén (mmarcen@unizar.es)
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Miriam Marcén: Universidad de Zaragoza

The Annals of Regional Science, 2024, vol. 73, issue 1, No 6, 135-163

Abstract: Abstract This paper assesses the impact of inheritance tax on population growth exploiting the quasi-random differences in the inheritance tax across different Spanish regions over the last 20 years. Using a dynamic difference-in-differences approach to municipality population data, we found a robust-positive short-term effect (1–4 years) on the population growth for small inheritances. The impact is sizable and represents roughly 6% of the standard deviation, but this dissipates after 7 years. The heterogeneity analysis by age group reveals a clear positive and lasting response to the inheritance tax benefits for those aged 50–69 years. This is especially seen in municipalities close to the border pointing to migration costs as a key factor in changes of residence in response to the inheritance tax law differences.

JEL-codes: H3 J6 K34 R23 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00168-023-01253-y

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