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Area‐specific subsidies and population dynamics: Evidence from the Australian zone tax offset

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  • Nathan Kettlewell
  • Oleg Yerokhin

Abstract

This paper studies the effect of the zone tax offset (ZTO), a place based income subsidy implemented in rural Australia since 1945. The policy was intended to improve the welfare of inhabitants and provide an incentive for settlement. Our empirical approach exploits the geographical discontinuity in the eligibility for the subsidy to identify its causal effect on population growth. Using data on population by locality from the historical censuses we find that the ZTO had a positive but only temporary effect on population growth in the targeted areas. Este artículo estudia el efecto de la compensación fiscal zonal (ZTO, por sus siglas en inglés), que es un subsidio sobre los ingresos basado en la localización y que se aplica en las zonas rurales de Australia desde 1945. La política tenía por objeto mejorar el bienestar de los habitantes y ofrecer un incentivo para los asentamientos. El enfoque empírico del estudio utiliza la discontinuidad geográfica en la elegibilidad del subsidio para identificar su efecto causal sobre el crecimiento de la población. Mediante el uso de datos de los censos históricos sobre la población por localidad, se encontró que la ZTO tuvo un efecto positivo, pero sólo temporal, sobre el crecimiento de la población en las áreas objetivo. 本稿は、1945年からオーストラリアの地方で実施されている、地域に応じた所得補助制度である僻地税控除 (zone tax offset: ZTO)の効果を検討する。この政策は、住民の福祉の改善と、定住の促進を狙ったものであった。本稿では、実証的アプローチにより、補助金交付対象者としての適格性の地理的な不連続性を活用し、人口増加に対するその因果効果を特定する。過去の人口調査から得られた地域別の人口データを使用したところ、対象地域における人口増加に対してZTOの効果があったものの、一時的なものであったことが確認された。

Suggested Citation

  • Nathan Kettlewell & Oleg Yerokhin, 2019. "Area‐specific subsidies and population dynamics: Evidence from the Australian zone tax offset," Papers in Regional Science, Wiley Blackwell, vol. 98(1), pages 451-476, February.
  • Handle: RePEc:bla:presci:v:98:y:2019:i:1:p:451-476
    DOI: 10.1111/pirs.12333
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