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The Effects of Taxation on Migration: Some Evidence for the ASEAN and APEC Economies

Author

Listed:
  • Edda Claus

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, and IIIS)

  • Iris Claus

    (Inland Revenue and Centre for Applied Macroeconomic Analysis)

  • Michael Dörsam

    (Universität Mainz)

Abstract
This paper investigates the effects of taxation on migration. It develops a stylized, two country model to examine the impact of taxation on labor mobility. The theoretical prediction that taxation affects migration decisions is supported by some empirical evidence for the ASEAN and APEC economies. Average tax rates are found to have a larger impact on migration choices than marginal rates. Moreover, the results suggest that educated migrants are more responsive to taxation than migrants with no education. Average tax rates are most important for migrants with secondary education, while marginal rates have a greater influence on the decisions of migrants with tertiary education than secondary educated migrants. The finding that taxation affects migration decisions, in particular of educated migrants, has important policy implications.

Suggested Citation

  • Edda Claus & Iris Claus & Michael Dörsam, 2010. "The Effects of Taxation on Migration: Some Evidence for the ASEAN and APEC Economies," Melbourne Institute Working Paper Series wp2010n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2010n19
    as

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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2010n19.pdf
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    References listed on IDEAS

    as
    1. Hatton, Tim & Williamson, Jeffrey G., 2002. "What Fundamentals Drive World Migration?," CEPR Discussion Papers 3559, C.E.P.R. Discussion Papers.
    2. John W. Diamond & George R. Zodrow (ed.), 2008. "Fundamental Tax Reform: Issues, Choices, and Implications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262042479, April.
    3. Jonathan Coppel & Jean-Christophe Dumont & Ignazio Visco, 2001. "Trends in Immigration and Economic Consequences," OECD Economics Department Working Papers 284, OECD Publishing.
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    5. Emmanuel Saez & Joel Slemrod & Seth H. Giertz, 2012. "The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 3-50, March.
    6. Timothy J Hatton & Jeffrey G Williamson, 2002. "Out of Africa? Using the Past to Project African Emigration Pressure in the Future," Review of International Economics, Wiley Blackwell, vol. 10(3), pages 556-573, August.
    7. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    8. repec:bla:reviec:v:10:y:2002:i:3:p:556-73 is not listed on IDEAS
    9. Jean-Christophe Dumont & Georges Lemaître, 2005. "Counting Immigrants and Expatriates in OECD Countries: A New Perspective," OECD Social, Employment and Migration Working Papers 25, OECD Publishing.
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    More about this item

    Keywords

    International migration; taxation;

    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
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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