Emigration and tax revenue

Yuanyuan Gu and Jhorland Ayala Garcia

The Journal of International Trade & Economic Development, 2025, vol. 34, issue 6, 1517-1533

Abstract: The World Migration Report 2020 shows that the number of international migrants increased from 84 million in 1970–272 million in 2019, accounting for 3.5% of the world’s population. This paper investigates the aggregated effect of emigration on the tax revenue of sending countries with a focus on developing nations. Using a gravity approach, we construct a time-varying exogenous instrument out of measures of changes in transportation technology from geographic time-invariant dyadic characteristics. Then, we follow an instrumental variable approach where we use our predicted emigration rate as an instrument of the observed migration rate. The results show that the predicted emigration rate is a good instrument of the current emigration rate for developing countries, and that there is a positive aggregated effect of emigration on tax revenue of sending countries. The results vary depending on the type of tax: emigration increases goods and services tax revenue, but it decreases income, profit, and capital gains tax revenue.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2024.2389875 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:34:y:2025:i:6:p:1517-1533

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2024.2389875

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().