Total State In-Migration Rates and Public Policy in the United States: A Comparative Analysis of the Great Recession and the Pre- and Post-Great Recession Years

This study adopts state-level data to investigate empirically the Tiebout hypothesis (as extended by Tullock) of ‘voting with one’s feet’ for the period referred to in the United States as the ‘Great Recession’ (2007–09). As compared with previous studies, more recent data are used and estimates are provided for three time periods: the ‘Great Recession’ (from 1 July 2007 to 30 June 2009), the pre-Great Recession period (1 July 2004 to 30 June 2006) and the post-Great Recession period (1 July 2009 to 30 June 2011). This analysis also differs from most previous literature by including a separate cost-of-living variable and a variable measuring effective state personal income tax rates. After allowing for various economic factors and quality of life/climate variables, migrants (consumer-voters) over the 2007–09 period appear to prefer states with lower effective state personal income tax rates and higher levels of ‘fiscal surplus’, defined in this study for each state as the total outlay per pupil on primary and secondary public education minus the per capita property tax level. The three empirical estimates all demonstrate that the Tiebout/Tullock hypothesis was operational not only during but also both before and after the Great Recession since for all three time periods migrants (consumer-voters) manifested a preference for lower effective state personal income tax rates and higher levels of fiscal surplus.

• Usha Nair-Reichert

Cebula, Richard J., Usha Nair-Reichert, and Christopher K. Coombs. "Total State In-Migration Rates and Public Policy in the United States: A Comparative Analysis of the Great Recession and the Pre- and Post-Great Recession Years." Regional Studies, Regional Science 1 (2014):  102-115.

• School of Economics