Immigrant Inventors and Local Income Taxes: Evidence from Swiss Municipalities

79 Pages Posted: 15 Jun 2021

See all articles by Rainer Widmann

Rainer Widmann

Max Planck Institute for Innovation and Competition

Date Written: September 30, 2020

Abstract

This paper studies the relationship between local personal income tax rates and the attractiveness of municipalities as residential locations for immigrant inventors in Switzerland. Exploiting sharp differences in top income tax rates across state borders, I find an elasticity of the probability that an inventor takes residence in a municipality with respect to the top net-of-tax rate of around 4. Additional evidence suggests that inventors’ residential location choices are consequential for the localization of entrepreneurial activity and local knowledge spillovers.

Keywords: Economics of Innovation, Inventor Mobility, Regional Innovation Systems, Income Taxes

Suggested Citation

Widmann, Rainer, Immigrant Inventors and Local Income Taxes: Evidence from Swiss Municipalities (September 30, 2020). Max Planck Institute for Innovation & Competition Research Paper No. 21-17, Available at SSRN: https://ssrn.com/abstract=3864113 or http://dx.doi.org/10.2139/ssrn.3864113

Rainer Widmann (Contact Author)

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

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