Fiscal Policy and Migration in the EU: Does the Tiebout Hypothesis Apply?

Socrates Karidis, Michael Quinn

Research output: Chapter in Book/Report/Conference proceedingConference proceedingpeer-review


The focus of this paper is the impact of fiscal policies on international migration flows. The Tiebout hypothesis proposes that individuals consider differences in tax rates and social spending when making migration decisions. While evidence of the Tiebout hypothesis has been found in several domestic U.S. and Canadian studies, this is the first paper to test the Tiebout hypothesis using bilateral international migration flows.

The Maastricht treaty has created a unique opportunity to study migration in an international context by removing legal barriers to migration within the European Union. Using data from EU countries throughout the 1980s and 1990s, this paper finds significant statistical support for the Tiebout hypothesis with regards to international migration flows. These results suggest that achieving greater fiscal harmonization across countries would lower migration flows. The results also imply that EU countries which are resistant to achieving fiscal harmonization with members may, as a result, have problems in attaining their other goal of reducing immigration (inward) from these countries.
Original languageEnglish
Title of host publication6th Global Conference on Business & Economics
PublisherLynchburg College
Number of pages18
ISBN (Print)0-9742114-6-X
Publication statusPublished - 15 Oct 2006
Externally publishedYes
EventGlobal Conference on Business and Economics - Cambridge, United States
Duration: 15 Oct 200617 Oct 2006
Conference number: 6


ConferenceGlobal Conference on Business and Economics
Country/TerritoryUnited States


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