Emigration and Entrepreneurial Drain

Massimo Anelli, Gaetano Basso, Giuseppe Ippedico () and Giovanni Peri

American Economic Journal: Applied Economics, 2023, vol. 15, issue 2, 218-52

Abstract: Emigration of young, highly educated individuals may deprive origin countries of entrepreneurs. We identify exogenous variation in emigration from Italy by interacting past diaspora networks and current economic pull factors in destination countries. We find that a 1 standard deviation increase in the emigration rate generates a 4.8 percent decline in firms' creation in the local labor market of origin. An accounting exercise decomposes the estimated effect into four components: subtraction of individuals with average entrepreneurial propensity, selection of young and college-educated among emigrants, negative spillovers on firm creation, and selection on unobservable characteristics positively associated with entrepreneurship.

JEL-codes: F22 J23 J82 L26 M13 R23 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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DOI: 10.1257/app.20210194

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