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Population growth and taxes: the effect of regional differences in the Spanish inheritance tax

Author

Listed:
  • Rafael González-Val

    (Universidad de Zaragoza
    Institut d’Economia de Barcelona (IEB))

  • Miriam Marcén

    (Universidad de Zaragoza)

Abstract

This paper assesses the impact of inheritance tax on population growth exploiting the quasi-random differences in the inheritance tax across different Spanish regions over the last 20 years. Using a dynamic difference-in-differences approach to municipality population data, we found a robust-positive short-term effect (1–4 years) on the population growth for small inheritances. The impact is sizable and represents roughly 6% of the standard deviation, but this dissipates after 7 years. The heterogeneity analysis by age group reveals a clear positive and lasting response to the inheritance tax benefits for those aged 50–69 years. This is especially seen in municipalities close to the border pointing to migration costs as a key factor in changes of residence in response to the inheritance tax law differences.

Suggested Citation

  • Rafael González-Val & Miriam Marcén, 2024. "Population growth and taxes: the effect of regional differences in the Spanish inheritance tax," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(1), pages 135-163, June.
    • Handle: RePEc:spr:anresc:v:73:y:2024:i:1:d:10.1007_s00168-023-01253-y
    DOI: 10.1007/s00168-023-01253-y
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    More about this item

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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