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

Adam Lavecchia, Robert McKercher and Alisa Tazhitdinova

No 12600, CESifo Working Paper Series from CESifo

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)
Date: 2026
New Economics Papers: this item is included in nep-mig, nep-pbe and nep-pub
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https://www.ifo.de/DocDL/cesifo1_wp12600.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)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12600

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