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Income redistribution and self-selection of immigrants

Giacomo Corneo and Guido Neidhöfer ()

No 13694, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze the effects of governmental redistribution of income on migration patterns using an Italian administrative dataset that includes almost every Italian citizen living abroad. Since Italy takes a middle ground in terms of redistribution, both the welfare-magnet effect from more redistributive countries and the propensity of the high-skilled to settle in countries with lower taxes can be empirically studied. Our findings confirm the hypothesis that destination countries with more redistribution receive a negative selection of Italian migrants. Policy simulations are run in order to gauge the magnitude of those migration effects. Based on estimated elasticities, we find that sizable increases in the amount of redistribution in Italy have small effects on the skill composition of the resident population.

Keywords: redistribution; Roy model (search for similar items in EconPapers)
JEL-codes: D31 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-int, nep-mig and nep-ure
Date: 2019-04
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