The Effects of Permanent Income Tax Cuts on Emigration from Israel

Abstract

In this paper, we estimate the effect on emigration of the permanent income tax reductions implemented in Israel during the period 2004–2010. We find that emigration flows from Israel declined, especially for brackets that benefited from a larger tax reduction. We also find that the effect is stronger for younger workers than for older ones, a result consistent with the former group deriving expected tax benefits over a longer duration of time.