ABOUT BOOK

We study location choice and residential mobility responses to local income taxes exploiting a special tax regime which applies to foreign employees residing in Switzerland. The institutional setting used generates a deterministic duration threshold at 5‚ÄØyears of stay in the country, at which the local tax rates an individual faces simultaneously change in all municipalities. We exploit this exogenous variation by applying a fuzzy regression discontinuity design to merged survey and administrative individual-level data. A dynamic location choice model allows us to derive testable hypotheses of individuals' location choices and mobility decisions. Our estimated treatment effects provide causal evidence for tax-induced residential choices and tax induced intra-national mobility