The Influence of Taxes on Migration: Evidence from Switzerland

Posted: 29 Feb 2008

See all articles by Alfonso Sousa-Poza

Alfonso Sousa-Poza

University of Hohenheim - Institute of Household and Consumer Economics; IZA Institute of Labor Economics

Thomas Liebig

Universität St. Gallen

Abstract

Empirical studies on the impact of taxation on migration have been limited by a lack of comparable data in an international context and a lack of variation in tax burdens within countries. A notable exception to the latter is Switzerland. Prior empirical studies on tax competition in Switzerland have had to rely on aggregated data. In general, these studies have been supportive of the notion of tax competition, i.e., high earners tend to relocate to low-tax regions. The authors use an alternative panel approach based on micro-data from the first three waves of the newly established Swiss Household Panel. Despite active community tax policies aimed at attracting new residents and a significant increase in tax-burden dispersion among communities in the past decade, no tax-induced migration is observed. Migration decisions are found to be strongly influenced by accommodation-related factors that point to important housing-market effects.

Keywords: Migration, Tax competition, Switzerland

Suggested Citation

Sousa-Poza, Alfonso and Liebig, Thomas, The Influence of Taxes on Migration: Evidence from Switzerland. Cambridge Journal of Economics, Vol. 30, No. 2, pp. 235-252, 2006, Available at SSRN: https://ssrn.com/abstract=904498

Alfonso Sousa-Poza

University of Hohenheim - Institute of Household and Consumer Economics ( email )

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IZA Institute of Labor Economics

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Germany

Thomas Liebig

Universität St. Gallen ( email )

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Saint Gallen, St. Gallen CH-9000
Switzerland

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