A new GLO Discussion Paper suggests a novel margin of mobility responses for top-earners: the spatial relocation of labor supply by nonresidents.
GLO Discussion Paper No. 1258, 2023
State Taxation of Nonresident Income and the Location of Work – Download PDF
by Agrawal, David R. & Tester, Kenneth
GLO Fellow David R. Agrawal
Author Abstract: Prior studies show that taxes matter for the residential locations of high-income earners. But, states raise a significant share of revenue from nonresidents. Using variation in state tax rates, we provide causal evidence on the effect of the net-of-tax rate on the location of labor supply for professional golfers. State taxes induce high-income earners to shift employment to low-tax states without a residence change. The elasticity of working in a state is 0.34, and consistent with superstar phenomenon, increases with earnings. Our results suggest a novel margin of mobility responses for top-earners: the spatial relocation of labor supply by nonresidents.
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Vol. 36, Issue 2, April 2023: Journal of Population Economics (JOPE) 16 articles.
Papers will be presented at the online JOPE Spring Conference on April 27, 2023. Registration details.
Vol. 36, Issue 1, January 2023: Journal of Population Economics (JOPE) 16 articles. https://link.springer.com/journal/148/volumes-and-issues/36-1
Watch the videos of article presentations on December 1, 2022 during the GLO Global Conference 2022.
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GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
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