State fiscal institutions and empty-nest migration: Are Tiebout voters hobbled? |
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Authors: | Martin Farnham Purvi Sevak |
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Affiliation: | a Department of Economics, University of Victoria, PO Box 1700 STN CSC, Victoria BC, Canada V8W 2Y2 b Department of Economics, Hunter College, 695 Park Avenue, New York, NY 10021, USA |
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Abstract: | Using the Health and Retirement Study and a national panel of local fiscal data, we test a lifecycle model of Tiebout sorting. On average, cross-state, empty-nest movers—presumed to be out of fiscal equilibrium—experience large fiscal gains in the form of reduced exposure to local school spending and property taxes, while local empty-nest movers experience no fiscal adjustment. We find evidence that within-state fiscal adjustment is constrained by state institutions that limit local discretion. Empty-nest households moving within states with school finance equalization do not engage in Tiebout-consistent fiscal adjustment, while those moving within states lacking school finance equalization adjust substantially. |
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Keywords: | Tiebout hypothesis Taxation Migration State and local government |
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