Tax-Induced Emigration: Who Flees High Taxes? Evidence from the Netherlands

José Victor C. Giarola, Olivier Marie, Frank Cörvers and Hans Schmeets

No 12739, CESifo Working Paper Series from CESifo

Abstract: We study a policy change in the Netherlands that unexpectedly reduced the duration of preferential tax treatment for high-skilled migrants from specific countries. Using administrative data, we document substantial out-migration responses driven entirely by the top 1% of earners, with no detectable response below the 95th percentile. Among the 95-99th percentile, previously internationally mobile workers also leave sooner, particularly to countries offering tax breaks, consistent with tax shopping behavior and pointing to distortionary effects of international tax competition. Increased tax intake from remaining workers offsets revenue lost from departing high earners, making the policy fiscally cost-neutral.

Keywords: taxation; immigration; labor income; Netherlands (search for similar items in EconPapers)
JEL-codes: F22 H31 J61 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12739

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