State taxes, tax exemptions, and elderly migration

Ali Onder, Herwig Schlunk

    Research output: Contribution to journalArticlepeer-review


    We use 1995-2000 interstate migration data for the elderly population in the U.S. to test how taxes and specific tax exemptions affect migration decisions. We show that the elderly prefer to migrate to states with low inheritance taxes, high property taxes, low amounts of federal revenue transfers, low cost of living, and higher average temperatures. The preference for high property taxes in destination states may be an indication that the elderly prefer locations where local amenities are capitalized into property values, since the elderly tend to be empty-nesters and presumably own properties that are on average smaller and less valuable. We show that exempting pension payments from income tax affects elderly out-migration negatively and significantly, while exempting prescription drug sales from sales tax affects elderly in-migration positively and significantly. As in the case of the preference for higher property taxes, free-riding behavior may be an explanation for these preferences.

    Original languageEnglish
    Pages (from-to)47-67
    Number of pages21
    JournalJournal of Regional Analysis and Policy
    Issue number1
    Publication statusPublished - 2015


    Dive into the research topics of 'State taxes, tax exemptions, and elderly migration'. Together they form a unique fingerprint.

    Cite this