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Taxation and Internal Migration: Evidence from the Swiss Census Using Community-Level Variation in Income Tax Rates

Thomas Liebig (), Patrick Puhani and Alfonso Sousa-Poza ()

No 2374, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate the relationship between income tax rate variation and internal migration for the unique case of Switzerland, whose system of determining tax rates primarily at the community level results in enough variation to permit analysis of their influence on migration. Specifically, using Swiss census data, we analyze migratory responses to tax rate variations for various groups defined by age, education, and nationality/residence permit. The results suggest that young Swiss college graduates are most sensitive to tax rate differences, but the estimated effects are not large enough to offset the revenue-increasing effect of a rise in tax rate. The migratory responses of foreigners and other age-education groups are even smaller, and reverse causation seems negligible.

Keywords: Switzerland; mobility; taxation; immigration; residence permit; visa status; foreigners (search for similar items in EconPapers)
JEL-codes: J61 H73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-ure
Date: 2006-10
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Published in: Journal of Regional Science, 2007, 47 (4), 807-836

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Related works:
Journal Article: TAXATION AND INTERNAL MIGRATION—EVIDENCE FROM THE SWISS CENSUS USING COMMUNITY‐LEVEL VARIATION IN INCOME TAX RATES* (2007) Downloads
Working Paper: TAXATION AND INTERNAL MIGRATION - EVIDENCE FROM THE SWISS CENSUS USING COMMUNITY-LEVEL VARIATION IN INCOME TAX RATES (2006) Downloads
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