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Effects of Taxation on Migration: Some Evidence for the ASEAN and APEC Economies

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  • Edda Claus
  • Iris Claus

Abstract

This paper investigates the effects of taxation on migration. It develops a stylized, two-country model to examine the impact of taxes on labor mobility. The theoretical predictions that taxes affect migration decisions and that educated workers are more responsive to taxation are supported by some empirical evidence for the economies of the Association of Southeast Asian Nations and the Asia-Pacific Economic Cooperation. The empirical application also shows that average tax rates have a larger impact on migration choices than marginal rates. Average tax rates are most important for migrants with secondary education, while marginal rates have a greater influence on the decisions of migrants with tertiary education compared to secondary-educated migrants. The finding that taxation affects migration decisions, in particular of educated migrants, has important policy implications.

Suggested Citation

  • Edda Claus & Iris Claus, 2011. "Effects of Taxation on Migration: Some Evidence for the ASEAN and APEC Economies," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 28(01), pages 22-50, June.
    • Handle: RePEc:wsi:adrxxx:v:28:y:2011:i:01:n:s0116110511000029
    DOI: 10.1142/S0116110511000029
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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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