Do European Top Earners React to Labour Taxation Through Migration ?

Pre-print, Working paper: This paper studies the effects of top income tax rates on top earners' migration, using a novel individual dataset on mobility representative of the entire population of 21 European countries. I exploit the differential effects of changes in top tax rates on individuals at different earnings levels. Top earners' location choices are significantly affected by top income tax rates. The elasticity of the number of top earners with respect to the net-of-tax rate is between 0.1 and 0.3; it is above one for foreigners. Migration elasticities differ widely across member states, leading to different incentives to implement beggar-thy-neighbour tax policies within Europe.

Author(s)

Mathilde Muñoz

Date of publication
  • 2021
Internal reference
  • PSE Working Papers n°2021-35
Version
  • 1