Migration Incentives and Taxation: Do Marginal Taxes Matter?
AbstractFaced with ageing populations many European countries may be tempted to attract immigrants. One way to do this is to offer tax incentives. Since the decision to migrate is a discrete choice it should be average taxes that are important for the migration decision. If, however, the supply of working hours is endogenous it is shown that marginal taxes are also important for the migration decision, even after controlling for average taxes. Hence, countries interested in attracting immigrants can do so even without reducing average taxes by having less progressive tax systems than other countries.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2004-7.
Date of creation: 21 Sep 2004
Date of revision:
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Web page: http://www.econ.au.dk/afn/
Migration; average taxes; marginal taxes; labor supply; population ageing.;
Find related papers by 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
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-09-30 (Accounting & Auditing)
- NEP-ALL-2004-09-30 (All new papers)
- NEP-PBE-2004-09-30 (Public Economics)
- NEP-PUB-2004-09-30 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mirrlees, J. A., 1982. "Migration and optimal income taxes," Journal of Public Economics, Elsevier, vol. 18(3), pages 319-341, August.
- Wilson, John D., 1980. "The effect of potential emigration on the optimal linear income tax," Journal of Public Economics, Elsevier, vol. 14(3), pages 339-353, December.
- Andersen, Torben M. & Sandemann Rasmussen, Bo, 1999. "Effort, taxation and unemployment1," Economics Letters, Elsevier, vol. 62(1), pages 97-103, January.
- Bucovetsky, S., 2003. "Efficient migration and redistribution," Journal of Public Economics, Elsevier, vol. 87(11), pages 2459-2474, October.
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