This paper studies the interstate effects of decentralized taxation and spending when individuals can work from home (WFH), a possibility that decouples a state’s population and employment levels. Our main findings show that a shift from a non-WFH economy to WFH reduces employment and raises the wage in high-tax states, with larger effects under source taxation. Once WHF is established, an increase in a state’s tax rate either reduces employ- ment further while raising the wage (source taxation) or leaves the labor market unaffected (residence taxation). We show that the residence-taxation equilibrium is efficient.
| Building: | Lorch Hall |
|---|---|
| Website: | |
| Event Type: | Workshop / Seminar |
| Tags: | Economics, Public Finance, seminar |
| Source: | Happening @ Michigan from Department of Economics, Public Finance, Department of Economics Seminars |
