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The Effects of Permanent Income Tax Cuts on Emigration from Israel

Author

Listed:
  • Tomer Blumkin
  • Yoram Margalioth
  • Michel Strawczynski

Abstract

In this paper we introduce an analytical framework for analyzing the effect of permanent income tax reductions on emigration and conduct an empirical analysis of their impact, based on the Israeli tax reductions during 2004-2010. We find that permanent tax reductions reduce the emigration flows from Israel. According to our findings, this effect is stronger for workers in the low-tech sector than for their high-tech counterparts, as the former appear to be more sensitive to changes in net wages. Moreover, the effect is stronger for younger workers who benefit from permanent tax reductions for a longer period during their careers, relative to older workers.

Suggested Citation

  • Tomer Blumkin & Yoram Margalioth & Michel Strawczynski, 2016. "The Effects of Permanent Income Tax Cuts on Emigration from Israel," CESifo Working Paper Series 6095, CESifo.
    • Handle: RePEc:ces:ceswps:_6095
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    References listed on IDEAS

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    1. Nir Jaimovich & Henry E. Siu, 2020. "Job Polarization and Jobless Recoveries," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 129-147, March.
    2. Jon Bakija & Joel Slemrod, 2004. "Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns," Department of Economics Working Papers 2004-12, Department of Economics, Williams College.
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    More about this item

    Keywords

    permanent tax cut; emigration;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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