Taxation and Migration: Evidence and Policy Implications

Henrik Kleven, Camille Landais, Mathilde Muñoz and Stefanie Stantcheva

No 25740, NBER Working Papers from National Bureau of Economic Research, Inc

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 until recently, and then discuss how recent work have 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: H2 H21 H24 H26 H71 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-lma, nep-mig, nep-pbe and nep-ure
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Published as Henrik Kleven & Camille Landais & Mathilde Muñoz & Stefanie Stantcheva, 2020. "Taxation and Migration: Evidence and Policy Implications," Journal of Economic Perspectives, vol 34(2), pages 119-142.

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Related works:
Journal Article: Taxation and Migration: Evidence and Policy Implications (2020)
Working Paper: Taxation and migration: evidence and policy implications (2020)
Working Paper: Taxation and Migration: Evidence and Policy Implications (2019)
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