Taxation and migration: evidence and policy implications

Henrik Kleven, Camille Landais, Mathilde Muñoz and Stefanie Stantcheva

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: In this article, we review a growing empirical literature on the effects of personal taxation on the geographic mobility of people and discuss its policy implications. We start by laying out the empirical challenges that prevented progress in this area and then discuss how recent work has made use of new data sources and quasi-experimental approaches to credibly estimate migration responses. This body of work has shown that certain segments of the labor market, especially high-income workers and professions with little location-specific human capital, may be quite responsive to taxes in their location decisions. When considering the implications for tax policy design, we distinguish between uncoordinated and coordinated tax policy. We highlight the importance of recognizing that mobility elasticities are not exogenous, structural parameters. They can vary greatly depending on the population being analyzed, the size of the tax jurisdiction, the extent of tax policy coordination, and a range of non-tax policies. While migration responses add to the efficiency costs of redistributing income, we caution against over-using the recent evidence of (sizeable) mobility responses to taxes as an argument for less redistribution in a globalized world.

JEL-codes: H23 H24 H71 H73 H87 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-03-01
New Economics Papers: this item is included in nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (61)

Published in Journal of Economic Perspectives, 1, March, 2020, 34(2), pp. 119 - 142. ISSN: 0895-3309

Downloads: (external link)
http://eprints.lse.ac.uk/105181/ Open access version. (application/pdf)

Related works:
Journal Article: Taxation and Migration: Evidence and Policy Implications (2020)
Working Paper: Taxation and Migration: Evidence and Policy Implications (2019)
Working Paper: Taxation and Migration: Evidence and Policy Implications (2019)
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:ehl:lserod:105181

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().