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Total State In-Migration and Public Policy in the United States: A Comparative Analysis of the Great recession and the Pre- and Post-Great Recession Years

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Listed:
  • Cebula, Richard
  • Nair-Reichert, Usha
  • Coombs, Christopher

Abstract

This study adopts state-level data to empirically investigate the Tiebout hypothesis (as extended by Tullock) of “voting with one’s feet” for the period referred to in the U.S. as the “Great Recession” (2007-2009). As compared to previous studies, we use more recent data and provide estimates for three time periods: the “Great Recession” (from July 1, 2007 through June 30, 2009), the pre-Great Recession period (July 1, 2004 through June 30, 2006) and the post-Great Recession period (July 1, 2009 through June 30, 2011). This analysis also differs from most previous literature by including a separate cost of living variable and a variable measuring effective state personal income tax rates. After allowing for various economic factors and quality of life/climate variables, migrants (consumer-voters) over the 2007-2009 period appear to prefer states with lower effective state personal income tax rates and higher levels of “fiscal surplus,” defined in this study for each state as the total outlay per pupil on primary and secondary public education minus the per capita property tax level. The three empirical estimates all demonstrate that the Tiebout/Tullock hypothesis was operational not only during but also both before and after the Great Recession since for all three time periods migrants (consumer-voters) manifested a preference for lower effective state personal income tax rates and higher levels of fiscal surplus.

Suggested Citation

  • Cebula, Richard & Nair-Reichert, Usha & Coombs, Christopher, 2013. "Total State In-Migration and Public Policy in the United States: A Comparative Analysis of the Great recession and the Pre- and Post-Great Recession Years," MPRA Paper 56484, University Library of Munich, Germany, revised 02 Feb 2014.
  • Handle: RePEc:pra:mprapa:56484
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    File URL: https://mpra.ub.uni-muenchen.de/56484/1/MPRA_paper_56484.pdf
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    References listed on IDEAS

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    1. Conway, Karen Smith & Houtenville, Andrew J., 2001. "Elderly Migration and State Fiscal Policy: Evidence from the 1990 Census Migration Flows," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 103-24, March.
    2. Leonard Carlson & Richard Cebula, 1981. "Voting with one's feet: A brief note on the case of public welfare and the American Indian," Public Choice, Springer, vol. 37(2), pages 321-325, January.
    3. Chi, Guangqing & Voss, Paul, 2005. "Migration Decision-making: A Hierarchical Regression Approach," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 35(2).
    4. Cebula, Richard, 1978. "The Determinants of Human Migration," MPRA Paper 58401, University Library of Munich, Germany.
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    Cited by:

    1. repec:spr:jecfin:v:42:y:2018:i:2:d:10.1007_s12197-017-9420-z is not listed on IDEAS
    2. Joshua C. Hall & Christopher Shultz & E. Frank Stephenson, 2018. "The political economy of local fracking bans," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 42(2), pages 397-408, April.
    3. Marie Poprawe, 2015. "On the relationship between corruption and migration: empirical evidence from a gravity model of migration," Public Choice, Springer, vol. 163(3), pages 337-354, June.

    More about this item

    Keywords

    total state in-migration; fiscal surplus; effective state income tax rates;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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