Using unique Swedish micro data we examine the impact of local public services on community choice. The choice of community is modeled as a choice between a discrete set of alternatives. The US literature has produced conflicting evidence with respect to the importance of local public services. We find a robust positive (negative) relationship between local public services (local income tax rates) and the residential choices of short-distance migrants (defined as those moving within a local labor market). However, local public characteristics are less important for migrants who entered from other local labor markets. Using information on subsequent mobility, we also investigate whether the last result is due to lack of information about the characteristics of the local public sector. The evidence suggests that this is not the case.
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Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number
2001:12.
Length: 27 pages Date of creation: 15 Apr 2001 Date of revision: Handle: RePEc:hhs:uunewp:2001_012
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Find related papers by JEL classification: D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
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