The Impacts of State Government Tax and Spending Policies on Domestic Migration in the United States: An Analysis for the Great Recession Period July 1, 2008 - June 30, 2009
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Abstract
This study investigates the relevance of the Tiebout hypothesis for migrationduring the Great Recession. The model allows for economic, quality-of-life, and fiscalfactors. For the study period July 1, 2008-June 30, 2009, the gross state-level in-migrationrate was an increasing function of expected per capita income, state parks per capita, andwarmer January temperatures and a decreasing function of the cost of living, the povertyrate, the average state income tax rate, per capita property taxation, and the presence ofhazardous waste sites. The estimation results suggest migrants prefer lower state incometax burdens and lower property tax burdens. Migrants’ evaluation of government servicesin determining their choice of location appears to depend upon the type of governmentservice. While consumer-voters on appear to prefer states with a greater provisionnumbers of parks per capita, the results do not indicate a strong preference for states withhigher per pupil outlays on public education. (J61, R23, H71, H72, H76)