Reform of the Personal Income Tax in Spain: Effects on internal mobility of the unemployed

González-Chapela, Jorge and Ortega-Lapiedra, Raquel (2019): Reform of the Personal Income Tax in Spain: Effects on internal mobility of the unemployed.

Abstract

This paper examines whether, and to what extent, the internal mobility of the unemployed in Spain was affected by a reform of the personal income tax that introduced a mobility incentive targeted at this group. The reform introduced a distinct change in the incentives to move for work for unemployed workers living in certain regions of Spain. The reform’s effectiveness is assessed by means of a difference-in-differences econometric approach, combined with nationally representative administrative data. Results suggest that the reform led, at most, to relatively few new migration flows, and account for the existence of differential migration trends between the regions that adopted the reform and those that did not.

• Item Type: MPRA Paper
• Language: English
• Keywords: Personal income tax, mobility, unemployed, Spain
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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