Area‐specific subsidies and population dynamics: Evidence from the Australian zone tax offset. Issue 1 (29th November 2017)

• Record Type: Journal Article
• Authors: Kettlewell, Nathan; Yerokhin, Oleg
• Is Part Of: Papers in regional science. Volume 98:Issue 1(2019)
• Page Start: 451
• Page End: 476
• Publication Date: 2017-11-29
• Subjects: income subsidy -- place based policy -- rural population -- spatial regression -- zone tax offset; Regional planning -- Periodicals; City planning -- Periodicals; Urbanization -- Periodicals; Economic geography -- Periodicals; 307.12
• DOI: 10.1111/pirs.12333
• Languages: English
• ISSNs: 1056-8190

Abstract

Abstract: This paper studies the effect of the zone tax offset (ZTO), a place based income subsidy implemented in rural Australia since 1945. The policy was intended to improve the welfare of inhabitants and provide an incentive for settlement. Our empirical approach exploits the geographical discontinuity in the eligibility for the subsidy to identify its causal effect on population growth. Using data on population by locality from the historical censuses we find that the ZTO had a positive but only temporary effect on population growth in the targeted areas.