Fiscal Effort and Internal Migration in Spain : A study of the determinants of internal migration with special attention to the difference in taxes between autonomous communities of Spain.

Abstract: This study examines the determinants of internal migration in Spain. It pays close attention to a key variable that has been little studied so far, taxes. That is, we analyze whether the difference in taxes between the autonomous communities of Spain is a determining factor for Spanish citizens when deciding to move. In addition to taxes, other determinants such as GDP, geographical distance between regions, unemployment and amenities are also analysed. The study is based on the theory of Gravity model and Pooled OLS and fixed effects specifications are used. The findings reveal that the tax effort has a positive effect on migration, but its magnitude is small.