Template-Type: ReDIF-Paper 1.0
Author-Name:  Salla Kalin
Author-Name-First: Salla
Author-Name-Last: Kalin
Author-Email: salla.kalin@helsinki.fi
Author-Workplace-Name: University of Helsinki
Author-Name:  Ilpo Kauppinen
Author-Name-First: Ilpo
Author-Name-Last: Kauppinen
Author-Email: ilpo.kauppinen@vatt.fi
Author-Workplace-Name: VATT Institute for Economic Research
Author-Name:  Kaisa Kotakorpi
Author-Name-First: Kaisa
Author-Name-Last: Kotakorpi
Author-Email: kaisa.kotakorpi@tuni.fi
Author-Workplace-Name: Tampere University
Author-Name:  Jukka Pirttilä
Author-Name-First: Jukka
Author-Name-Last: Pirttilä
Author-Email: jukka.pirttila@helsinki.fi
Author-Workplace-Name: University of Helsinki and VATT Institute for Economic Research
Title: Migration and tax policy:Evidence from Finnish full population data
Abstract: While evidence on the impact of taxation on the international migration of
certain special groups of workers has expanded, evidence on the links between
taxes and migration of the general population is extremely limited. We aim to
fill this gap by estimating the impact of taxation on the migration decisions of
the entire working population in a high-tax source country, Finland. We find
that the average domestic elasticity of migration with respect to the domestic
tax rate is very small (around 0.001). This holds for various occupational and
income groups of interest. We also provide a first empirical implementation of
the theoretical results of Lehmann et al. (2014), who show that if a fully nonlinear
income tax schedule at the top is used, the key sufficient statistic for the
optimal tax is a semi-elasticity of migration. Our estimates indicate that the
migration responses increase for top earners, but remain very small, at least up
to the top per mille of income earners.
Length: 58 pages
Creation-Date:  2022-10
Publication-Status: Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research
File-URL: https://verotutkimus.fi/verotutkimus/wp-content/uploads/2022/10/FIT-working-paper-1-Migration-and-Tax-Policy-2.pdf
File-Format: Application/pdf
File-Function: First version, 2022
Number: 1
Classification-JEL: J61, H31
Keywords: taxation, emigration
Handle: RePEc:fit:wpaper:1