The Impacts of State Government Tax and Spending Policies on Domestic Migration in the United States: An Analysis for the Great Recession Period July 1, 2008-June 30, 2009

This study investigates the relevance of the Tiebout hypothesis for migration during the Great Recession. The model allows for economic, quality-of-life, and fiscal factors. For the study period July 1, 2008-June 30, 2009, the gross state-level in-migration rate was an increasing function of expected per capita income, state parks per capita, and warmer January temperatures and a decreasing function of the cost of living, the poverty rate, the average state income tax rate, per capita property taxation, and the presence of hazardous waste sites. The estimation results suggest migrants prefer lower state income tax burdens and lower property tax burdens. Migrants’ evaluation of government services in determining their choice of location appears to depend upon the type of government service. While consumer-voters on appear to prefer states with a greater provision numbers of parks per capita, the results do not indicate a strong preference for states with higher per pupil outlays on public education.