Higher tax bands have not affected high income migration away from Scotland.
We find no evidence of a change in labour market participation following the Scottish Income Tax changes. The semi-elasticity estimates, which capture the percentage point change in labour market participation relative to the percentage change in the ARR, are not significantly positive. The estimates are generally close to 0 but the confidence intervals are in most cases wide suggesting that the results may not be precise. Therefore, while our results suggest no changes in labour market participation following the Scottish Income Tax changes, we conclude that the true changes are uncertain and that we have not been able to detect if there was a change. We consider limitations to the analysis in the discussion section (6.6).
We find some evidence of a decrease in net cross-border migration to Scotland for taxpayers earnings above the Higher rate threshold (HRT) following the Scottish Income Tax changes. The semi-elasticity estimates, which capture the percentage point change in net cross-border migration relative to the percentage change in the ARR, are approximately 2.56 for taxpayers above £500,000 in taxable income and 0.19 to 0.44 for taxpayers below £500,000 in taxable income in 2018 to 2019 (the year of the policy change). The semi-elasticities are generally increasing with income.