Study: Employment, Not Taxes, Drives Families’ Decisions To Move Across State Lines

If states raise taxes, do residents flee for other states? Policymakers in New England and around the country face this question any time they consider new sources of revenue. In new research from the Political Economy Research Institute at the University of Massachusetts, Amherst, Jeffrey Thompson adds new analysis to the body of research laying this concern to rest. In The Impact of Taxes on Migration in New England , Thompson analyzes new data, and finds that the impact of taxes on cross-state migration is very weak. Other factors—primarily employment and family concerns—provide the main reasons that families move.

Amherst - As the New England states continue to struggle with serious budget shortfalls, policymakers face pressure to turn to increased taxes to replenish the coffers. Opponents raise the specter of families fleeing for lower-tax states in response. But in this new study from Jeffrey Thompson of thePolitical Economy Research Instituteat the University of Massachusetts, that concern is laid to rest. InThe Impact of Taxes on Migration in New England, Thompson analyzes new data, and finds that the impact of taxes on cross-state migration is very weak. Other factors—primarily employment and family concerns—provide the main reasons that families move. And family ties, comfort with their community, jobs, the costs of moving, and valuing the public services in their state are why families stay put, regardless of their state's tax rates.

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