Thomas Liebig

Taxation and Internal Migration: Evidence from the Swiss Census Using Community-Level Variation in Income Tax Rates

We investigate the relationship between income tax rate variation and internal migration for the unique case of Switzerland, whose system of determining tax rates primarily at the community level results in enough variation to permit analysis of their influence on migration. Specifically, using Swiss census data, we analyze migratory responses to tax rate variations for various groups defined by age, education, and nationality/residence permit. The results suggest that young Swiss college graduates are most sensitive to tax rate differences, but the estimated effects are not large enough to offset the revenue-increasing effect of a rise in tax rate. The migratory responses of foreigners and other age-education groups are even smaller, and reverse causation seems negligible.

Jobs for Immigrants

Evidence from many OECD countries shows that immigrants, in particular recent arrivals, tend to be especially affected by an economic downturn. The available tentative evidence on unemployment suggests that this is also the case in Norway in the current downturn, particularly with respect to the many recent labour migrants from the new EU member countries. Since this can have a lasting effect on their labour market outcomes, it is important that the integration of immigrants remains a priority for policy. D’apres les observations faites dans de nombreux pays de l’OCDE, les immigres, en particulier les nouveaux arrivants, sont en general particulierement touches en cas de deterioration de la conjoncture economique. Les premieres informations disponibles sur le chomage permettent de penser que c’est aussi le cas en Norvege au cours de la recession actuelle, en particulier pour les nombreux migrants de travail arrives recemment. Cela pouvant affecter durablement leurs resultats sur le marche du travail, il est important que l’integration des immigres reste une priorite pour les pouvoirs publics. Au cours des annees precedentes, le ralentissement de l’economie, les resultats au regard de l’emploi se sont clairement ameliores a la faveur d’une situation economique favorable, et a l’heure actuelle ils sont globalement plutot positifs par rapport au passe. Meme si la forte migration de travail venue d’Europe de l’Est a contribue a la hausse du taux d’emploi de la population immigree dans son ensemble, les resultats de groupes de migrants de plus longue date se sont egalement ameliores.

Taxation, Ethnic Ties and the Location Choice of Highly Skilled Immigrants

With the emerging international competition to attract highly skilled migrants, the determinants of their choice of residential location are increasing in importance. Besides expected wages and job opportunities, the costs of migration and the subjective evaluation of a location, two other factors help determine the expected net return from migration: taxes and network effects. Yet empirical research on the effects of these two factors and their interaction on highly skilled migration is lacking. The aim of this paper is to throw some empirical light on the role of these two factors via a case study of Switzerland. For several reasons, Switzerland is a particularly interesting case study for this task. Tax rates are primarily determined at the local level and thus enough variation exists to analyse their influence on migration. Furthermore, in contrast to other European countries, Switzerland has pursued a fairly liberal immigration policy and maintains a unique permit system that has become increasingly skills-focused: more than 35% of all persons with a university degree resident in Switzerland are immigrants. Analysis of the 2000 Swiss census data provides evidence for fiscally-induced migration within Switzerland, particularly with respect to a location choice of highly skilled immigrants. Avec l’emergence d’une competition internationale pour attirer les migrants hautement qualifies, les determinants des choix de lieu de residence de ces derniers gagnent en importance. En plus des perspectives de salaires et d’emploi, du cout de migration et des appreciations subjectives portees sur ces lieux, deux autres facteurs semblent jouer sur le rendement net attendu de la migration : les impots et les effets de reseaux. Ceci etant, l’etude de l’impact de ces deux facteurs, ainsi que des effets de leurs interactions, manquent dans les analyses empiriques. Le but de ce papier est d’analyser le role de ces deux facteurs a travers l’etude du cas de la Suisse. Pour plusieurs raisons, la Suisse s’avere un pays particulierement interessant a etudier a cet egard. Les taux d’imposition sont principalement determines au niveau local; d’ou l’existence de variations suffisantes pour analyser leur impact sur la migration. De plus, contrairement a d’autres pays europeens, la Suisse a poursuivi une politique assez liberale en matiere d’immigration et maintient un systeme unique de permis, qui est devenu de plus en plus cible sur les qualifications : plus de 35 % de toutes les personnes detenant un diplome universitaire qui resident en Suisse sont des immigres. L’analyse des donnees du recensement Suisse de 2000 met en evidence la migration intra-Suisse engendree par des raisons fiscales, concernant plus particulierement le choix des lieux de residence des immigres hautement qualifies.

Children of Immigrants in the Labour Markets of EU and OECD Countries

This document provides a first comparative overview of the presence and outcomes of the children of immigrants in the labour markets of OECD countries, based on a collection of data from 16 OECD countries with large immigrant populations. Its key findings are the following: • In about half of all OECD countries, children of immigrants - both native-born offspring of immigrants and foreign-born who immigrated before adulthood with their parents - account for ten or more percent of young adults (aged 20-29) in the labour market. • Most children of immigrants have parents from low- and middle-income countries, and the share with parents from such countries is larger among foreign-born children than among the nativeborn offspring of immigrants. This is a result of the diversification of migration flows over the past 20 years. • Among the native-born children of immigrants in European OECD countries, Turkey is the single most important country of parental origin, followed by Morocco. When comparing the countries of parental origin for the native- and the foreign-born children of immigrants, one observes in the European OECD countries a strong decline in the importance of the origin countries of the post-World War II wave of labour migration, in particular Turkey but also Morocco, Italy, Portugal and Pakistan. • In all countries except Germany and Switzerland, a large majority of the native-born children of immigrants have obtained the nationality of their countries of residence. • The OECD’s Programme for International Student Assessment (PISA) has demonstrated lower assessment results for the children of immigrants in most European OECD countries. There are close links between PISA outcomes and educational attainment levels. In the countries in which children of migrants have large gaps in PISA-scores vis-a-vis children of natives, children of immigrants are also strongly overrepresented among those who are low-educated. • One observes a clear difference between the non-European OECD countries (Australia, Canada, New Zealand and the United States) on the one hand and European OECD countries on the other hand. In the former, the children of migrants have education and labour market outcomes that tend to be at least at par with those of the children of natives. In the European OECD countries (with the exception of Switzerland), both education and labour market outcomes of the children of immigrants tend to be much less favourable. • Part of the differences in labour market outcomes observed in most European OECD countries is due to the fact that the children of immigrants tend to have a lower educational attainment than the children of natives. However, significant gaps remain in many of these countries even after correcting for differences in average educational attainment. • The remaining gaps are particularly large for the offspring of migrants from Turkey and from certain non-OECD countries such as Morocco. In all countries, children with parents from middle-and low-income countries have lower outcomes than children of immigrants from highincome countries. The differences are particularly large for young immigrant women. • On average over the OECD countries for which data are available, the children of immigrants have an unemployment rate that is about 1.6 times higher than that of the children of natives, for both genders. The children of immigrants also have lower employment rates – the gaps compared with the children of natives are about 8 percentage points for men and about 13 percentage points for women. • For women, one observes much better results for the native children of immigrants than for young immigrants, suggesting that having been fully raised and educated in the country of residence brings some additional benefit. However, this is not observed for men, where the native-born children of immigrants do not seem to fare better than the young immigrants, particularly after accounting for the lower educational attainment of the latter group. • The less favourable picture for the female children of migrants compared with their male counterparts is less clear-cut after controlling for socio-demographic characteristics, in particular marital status and number of children. Part of the “double disadvantage” for the female offspring of immigrants seems to be due to the fact that in the age range under consideration (20-29 years), they are overrepresented among those who are (already) married and have children. Indeed, once controlling for this, native-born women who have parents from the Maghreb region or Southern Europe, as well those with Turkish parental origin, tend to have higher employment rates - relative to comparable natives - than their male counterparts. • When in employment, children of immigrants are in occupations similar to those of the children of natives. They are also widely spread throughout the economy, but tend to remain underrepresented in the public sector. Les principales conclusions qui s’en degagent sont resumees ci-dessous. • Dans la moitie environ de l’ensemble des pays de l’OCDE, les enfants d’immigres (aussi bien ceux nes dans le pays hote de parents immigres que ceux nes a l’etranger et qui ont immigre avec leurs parents avant d’avoir atteint l’âge adulte) representent au moins dix pour cent des jeunes adultes (jeunes âges de 20 a 29 ans) presents sur le marche du travail. • Les parents des enfants immigres sont le plus souvent originaires de pays a revenu faible ou intermediaire, et la proportion d’enfants dont les parents sont dans ce cas est plus forte parmi ceux qui sont nes a l’etranger que parmi les enfants nes dans le pays hote. • Parmi les enfants nes dans un pays europeen de l’OCDE de parents immigres, ceux dont les parents sont originaires de Turquie sont les plus nombreux, suivis des enfants d’origine marocaine. Quand on compare les pays d’origine des parents immigres d’enfants nes dans le pays hote et d’enfants nes a l’etranger, on observe, dans les pays europeens de l’OCDE, un fort recul de l’importance des pays d’origine correspondant a la vague de migration de travail de l’apres- Deuxieme Guerre mondiale. Cette observation concerne notamment la Turquie, mais aussi le Maroc, l’Italie, le Portugal et le Pakistan. • Dans tous les pays hormis l’Allemagne et la Suisse, une grande majorite des enfants nes sur le territoire de parents immigres ont obtenu la nationalite de leur pays de residence. • Le Programme international de l’OCDE pour le suivi des acquis des eleves (PISA) a demontre que, dans la plupart des pays europeens de l’Organisation, les enfants d’immigres obtenaient de pietres resultats lors des evaluations. Il existe un lien etroit entre les acquis scolaires mesures par PISA et les niveaux d’etudes atteints. Dans les pays ou l’on releve d’importantes disparites entre les enfants d’immigres et les enfants de parents autochtones du point de vue des notes obtenues lors des tests PISA, les premiers sont aussi fortement surrepresentes parmi les personnes peu instruites. • On releve une nette difference entre les pays non europeens de l’OCDE (Australie, Canada, Etats-Unis et Nouvelle-Zelande), d’une part, et les pays europeens de l’Organisation, d’autre part. Dans le premier groupe, les enfants d’immigres affichent generalement, au regard de l’education et de l’emploi, des resultats au moins egaux a ceux des enfants de parents autochtones. Mais dans les pays europeens de l’OCDE (a l’exception de la Suisse), les resultats des enfants d’immigres au regard de l’education et de l’emploi sont generalement moins bons.