IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4134.html
   My bibliography  Save this paper

What Do Immigrants Value Most About Switzerland? Evidence of the Relative Importance of Income Taxes

Author

Listed:
  • Mario Morger

Abstract

This study investigates whether migrants, once they have decided to move to Switzerland, prefer to settle in municipalities that feature low income taxes. In line with the existing literature, results from cluster-specific count data models indicate that income taxes are a significant pull factor for international migration decisions. The same is true with respect to intra-national migration. However, dominance analysis suggests that the relative impact of taxes compared to other locational factors is rather low. Urbanity characteristics, labor-market, and network effects are by far the most important factors to influence the choice of destination municipality.

Suggested Citation

  • Mario Morger, 2013. "What Do Immigrants Value Most About Switzerland? Evidence of the Relative Importance of Income Taxes," CESifo Working Paper Series 4134, CESifo.
    • Handle: RePEc:ces:ceswps:_4134
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp4134.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    2. Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003. "A Tractable Approach to the Firm Location Decision Problem," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 201-204, February.
    3. Timothy J. Hatton & Jeffrey G. Williamson, 2002. "What Fundamentals Drive World Migration?," NBER Working Papers 9159, National Bureau of Economic Research, Inc.
    4. Wooldridge, Jeffrey M., 1999. "Distribution-free estimation of some nonlinear panel data models," Journal of Econometrics, Elsevier, vol. 90(1), pages 77-97, May.
    5. Thomas Liebig & Alfonso Sousa-Poza, 2006. "The influence of taxes on migration: evidence from Switzerland," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(2), pages 235-252, March.
    6. Klaus Nowotny, 2011. "Welfare Magnets, Taxation and the Location Decisions of Migrants to the EU," WIFO Working Papers 393, WIFO.
    7. Schmidheiny, Kurt, 2006. "Income segregation and local progressive taxation: Empirical evidence from Switzerland," Journal of Public Economics, Elsevier, vol. 90(3), pages 429-458, February.
    8. Thomas Liebig & Patrick A. Puhani & Alfonso Sousa‐Poza, 2007. "Taxation And Internal Migration—Evidence From The Swiss Census Using Community‐Level Variation In Income Tax Rates," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 807-836, October.
    9. Peter Egger & Doina Maria Radulescu, 2009. "The Influence of Labour Taxes on the Migration of Skilled Workers," The World Economy, Wiley Blackwell, vol. 32(9), pages 1365-1379, September.
    10. J Shen, 1999. "Modelling Regional Migration in China: Estimation and Decomposition," Environment and Planning A, , vol. 31(7), pages 1223-1238, July.
    11. Beatrix Eugster & Raphaël Parchet, 2011. "Culture and Taxes: Towards Identifying Tax Competition," Cahiers de Recherches Economiques du Département d'économie 11.05, Université de Lausanne, Faculté des HEC, Département d’économie.
    12. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    13. Feld, Lars P. & Kirchgassner, Gebhard, 2001. "Income tax competition at the State and Local Level in Switzerland," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 181-213, April.
    14. Henrik Jacobsen Kleven & Camille Landais & Esben Schultz, 2014. "Migration and Wage Effects of Taxing Top Earners: Evidence from the Foreigners' Tax Scheme in Denmark," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 333-378.
    15. Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2012. "Do agglomeration economies reduce the sensitivity of firm location to tax differentials?," Economic Journal, Royal Economic Society, vol. 122(563), pages 1069-1093, September.
    16. Schaltegger, Christoph A. & Somogyi, Frank & Sturm, Jan-Egbert, 2011. "Tax competition and income sorting: Evidence from the Zurich metropolitan area," European Journal of Political Economy, Elsevier, vol. 27(3), pages 455-470, September.
    17. Henrik Jacobsen Kleven & Camille Landais & Emmanuel Saez, 2013. "Taxation and International Migration of Superstars: Evidence from the European Football Market," American Economic Review, American Economic Association, vol. 103(5), pages 1892-1924, August.
    18. Wido Geis & Silke Uebelmesser & Martin Werding, 2013. "How do Migrants Choose Their Destination Country? An Analysis of Institutional Determinants," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 825-840, November.
    19. Keith Dowding & Peter John & Stephen Biggs, 1994. "Tiebout : A Survey of the Empirical Literature," Urban Studies, Urban Studies Journal Limited, vol. 31(4-5), pages 767-797, May.
    20. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2008. "Selection and network effects--Migration flows into OECD countries 1990-2000," European Economic Review, Elsevier, vol. 52(7), pages 1160-1186, October.
    21. Kirchgassner, Gebhard & Pommerehne, Werner W., 1996. "Tax harmonization and tax competition in the European Union: Lessons from Switzerland," Journal of Public Economics, Elsevier, vol. 60(3), pages 351-371, June.
    22. Christoph A. Schaltegger & Frank Somogyi & Jan-Egbert Sturm, 2009. "Tax competition and income sorting," KOF Working papers 09-240, KOF Swiss Economic Institute, ETH Zurich.
    23. Razia Azen & Nicole Traxel, 2009. "Using Dominance Analysis to Determine Predictor Importance in Logistic Regression," Journal of Educational and Behavioral Statistics, , vol. 34(3), pages 319-347, September.
    24. Jukka Pirttilä, 2004. "Is International Labour Mobility a Threat to the Welfare State? Evidence from Finland in the 1990s," Finnish Economic Papers, Finnish Economic Association, vol. 17(1), pages 18-34, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Slotwinski, Michaela & Schmidheiny, Kurt, 2014. "Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners Tax Scheme in Switzerland," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100292, Verein für Socialpolitik / German Economic Association.
    2. Mario Morger, 2017. "Heterogeneity in Income Tax Capitalization: Evidence from the Swiss Housing Market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(3), pages 227-259, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brülhart, Marius & Bucovetsky, Sam & Schmidheiny, Kurt, 2015. "Taxes in Cities," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1123-1196, Elsevier.
    2. Martinez, Isabel Z., 2016. "Beggar-Thy-Neighbour Tax Cuts: Mobility after a Local Income and Wealth Tax Reform in Switzerland," VfS Annual Conference 2016 (Augsburg): Demographic Change 145643, Verein für Socialpolitik / German Economic Association.
    3. Martínez, Isabel Z., 2022. "Mobility responses to the establishment of a residential tax haven: Evidence from Switzerland," Journal of Urban Economics, Elsevier, vol. 129(C).
    4. Mario Morger, 2017. "Heterogeneity in Income Tax Capitalization: Evidence from the Swiss Housing Market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(3), pages 227-259, July.
    5. Slotwinski, Michaela & Schmidheiny, Kurt, 2014. "Behavioral Responses to Local Tax Rates: Quasi-Experimental Evidence from a Foreigners Tax Scheme in Switzerland," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100292, Verein für Socialpolitik / German Economic Association.
    6. Burret, Heiko T. & Feld, Lars P. & Schaltegger, Christoph A., 2022. "Fiscal federalism and economic performance new evidence from Switzerland," European Journal of Political Economy, Elsevier, vol. 74(C).
    7. Henrik Kleven & Camille Landais & Mathilde Muñoz & Stefanie Stantcheva, 2020. "Taxation and Migration: Evidence and Policy Implications," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 119-142, Spring.
    8. Christian Frey & Christoph Gorgas & Christoph A. Schaltegger, 2017. "The Long Run Effects of Taxes and Tax Competition on top Income Shares: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 792-820, December.
    9. Lars P. Feld & Emmanuelle Reulier, 2009. "Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons," German Economic Review, Verein für Socialpolitik, vol. 10(1), pages 91-114, February.
    10. Enrico Moretti & Daniel J. Wilson, 2017. "The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists," American Economic Review, American Economic Association, vol. 107(7), pages 1858-1903, July.
    11. Enrico Rubolino & Tommaso Giommoni, 2023. "Taxation and Mobility: Evidence from Tax Decentralization in Italy," CESifo Working Paper Series 10655, CESifo.
    12. López-Laborda Julio & Rodrigo Fernando, 2022. "Mobility of Top Income Taxpayers in Response to Regional Differences in Personal Taxes: Evidence from Spain," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 152-169, January.
    13. Feld Lars P. & Baskaran Thushyanthan, 2010. "Federalism, Budget Deficits and Public Debt: On the Reform of Germany's Fiscal Constitution," Review of Law & Economics, De Gruyter, vol. 6(3), pages 365-393, December.
    14. Alejandro Esteller & Amedeo Piolatto & Matthew D. Rablen, 2016. "Taxing high-income earners: tax avoidance and mobility," IFS Working Papers W16/07, Institute for Fiscal Studies.
    15. Sigrid Roehrs & David Stadelmann, 2010. "Mobility and local income redistribution," Working Papers 2010/4, Institut d'Economia de Barcelona (IEB).
    16. Giertz, Seth H. & Ramezani, Rasoul, 2018. "Taxes, Wage Capitalization and the Ability of States to Redistribute Income," GLO Discussion Paper Series 291, Global Labor Organization (GLO).
    17. Etienne Lehmann & Laurent Simula & Alain Trannoy, 2014. "Tax me if you can! Optimal Nonlinear Income Tax Between Competing Governments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1995-2030.
    18. Christoph Basten & Maximilian Ehrlich & Andrea Lassmann, 2017. "Income Taxes, Sorting and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland," Economic Journal, Royal Economic Society, vol. 0(601), pages 653-687, May.
    19. Lars P. Feld & Emmanuelle Reulier, 2009. "Strategic Tax Competition in Switzerland: Evidence from a Panel of the Swiss Cantons," German Economic Review, Verein für Socialpolitik, vol. 10(1), pages 91-114, February.
    20. Bratu, Cristina & Dahlberg, Matz & Engdahl, Mattias & Nikolka, Till, 2020. "Spillover effects of stricter immigration policies," Journal of Public Economics, Elsevier, vol. 190(C).

    More about this item

    Keywords

    migration; tax competition; dominance analysis; relative importance;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4134. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.