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Cited by 335Corporate Taxation and AvoidanceFiscal Policy and Economic GrowthMigration and Labor Dynamics

The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists

Moretti, Enrico, Wilson, Daniel J.·2017·American Economic Review
DOI 10.1257/aer.20150508
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Abstract

We quantify how sensitive is migration by star scientists to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists' migration patterns. The long-run elasticity of mobility relative to taxes is 1.8 for personal income taxes, 1.9 for state corporate income tax, and −1.7 for the investment tax credit. While there are many other factors that drive when innovative individuals and innovative companies decide to locate, there are enough firms and workers on the margin that state taxes matter. (JEL H24, H25, H71, H73, J44, J61, R32)

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  • Moretti and Wilson (2017) estimate large long-run elasticities of mobility with respect to personal and corporate income taxes; the elasticity with respect to personal income taxes is 1.8.

    “They estimate large long-run elasticities of mobility with respect to both personal and corporate income taxes. The elasticity of mobility with respect to personal income taxes is equal to 1.8.”

    From Taxation and Migration: Evidence and Policy Implications (2020) · cites this paper as Moretti and Wilson (2017)

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Research works printed but not linked: 25

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  4. Cohen, Wes 'Fifty Years of Empirical Studies of Innovative Activity and Performance,' in Handbook of Economics of Innovation, Vol. 1, 2010, pp. 129-213.
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  8. Faulk, Dagney. 'Do State Economic Development Incentives Create Jobs? An Analysis of State Employment Tax Credits. National Tax Journal. 2002.
  9. Griliches, Zvi 'R&D and Productivity: The Econometric Evidence' University of Chicago Press Volume, January 1998
  10. Head, K., Ries, J., and Swenson, D., 1999. Attracting foreign manufacturing: investment promotion and agglomeration. Regional Science and Urban Economics 29 (2), 197 - 218.
  11. Helsley, Robert W. and William C. Strange, "Matching and Agglomeration Economics in a System of Cities," Regional Science and Urban Economics, 20,1990, pp. 189-212.
  12. Haughwout, Andrew, Robert Inman, Steven Craig, and Thomas Luce. 2004. 'Local Revenue Hills: Evidence from Four U.S. Cities.' Review of Economics and Statistics 86 (2): 570-85.
  13. Jordà, Oscar (2005). 'Estimation and Inference of Impulse Responses by Local Projections,' American Economic Review , Vol. 95(1), pp. 161-182.
  14. Kirchgassner, G and W W. Pommerehne (1996) 'Tax Harmonization and Tax Competition in the European Union: Lessons from Switzerland.' Journal of Public Economics, 60(3), 351-71
  15. Kleven, H J, C Landais, E Saez, and E A Schultz (2014) 'Migration and Wage Effects of Taxing Top Earnings: Evidence from the Foreigners' Tax Scheme in Denmark' QJE 129(1): 333-78
  16. McFadden, D. L. 1974. 'Conditional logit analysis of qualitative choice behavior.' In Frontiers in Econometrics, ed. P. Zarembka, 105-142. New York: Academic Press.
  17. McFadden, D. L. 1978. 'Modelling the Choice of Residential Location.' In Karlqvist, A., L. Lundqvist, F. Snickars, and J. Weibull (eds.), Spatial Interaction Theory and Planning Models, 75-96, North Holland: Amsterdam.
  18. Moretti, E, and D. Wilson (2014) "State Incentives for Innovation, Star Scientists and Jobs: Evidence from Biotech", The Journal of Urban Economics, forthcoming
  19. Moulton, Brent R. 1990. 'An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Units.' The Review of Economics and Statistics, 72(2): 334-338.
  20. Schmidheiny Kurt (2006), "Income Segregation and Local Progressive Taxation: Empirical Evidence from Switzerland." Journal of Public Economics , 90(3), 429-458.
  21. Solon, Gary, Steven J. Haider and Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
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Authors
Moretti, E., & Wilson, D. J.
Affiliations
  • University of California, Berkeley (US)
  • Federal Reserve Bank of San Francisco (US)
ORCID
Venue
American Economic Review
Publisher
American Economic Association
Published
2017-07-01
Volume
107
Issue
7
Pages
1858-1903
ISSN
0002-8282 (ISSN-L)
DOI
10.1257/aer.20150508
OpenAlex
W2114189913
Cited by
335
References
3
Citations by year
2026: 30 · 2025: 54 · 2024: 29 · 2023: 51 · 2022: 35 · 2021: 35 · 2020: 24 · 2019: 30 · 2018: 16 · 2017: 12 · 2016: 9 · 2015: 5 · 2014: 3 · 2013: 1 · 2012: 1
FWCI
68.87
Type
journal article
Language
en
Open access
closed
Locations
  • American Economic Review (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Corporate Taxation and Avoidance
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Fiscal Policy and Economic Growth
  • Social Sciences › Sociology and Political Science › Migration and Labor Dynamics
Keywords
state taxation, migration of scientists, top income earners, personal income tax, corporate income tax, investment tax credit, spatial mobility, location choice

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