Tax incentives and return migration

Jacopo Bassetto and Giuseppe Ippedico ()

No 2024-05, Discussion Papers from University of Nottingham, GEP

Abstract: Brain drain is a key policy concern for many countries. In this paper we study whether tax incentives are an effective policy to attract high-skilled expatriates back to their home country, exploiting a generous income tax break for Italian returnees. Using administrative data and a Triple Differences design, we find that eligible individuals are 27% more likely to return to Italy. Additionally, we uncover significant effects throughout the wage distribution, revealing that tax-induced migration is a broad phenomenon beyond top earners. A cost-benefit analysis shows that the tax scheme can pay for itself by targeting young high-skilled individuals.

Keywords: tax incentives; return migration; wage distribution (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-int, nep-lab, nep-pbe, nep-pub and nep-ure
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https://www.nottingham.ac.uk/gep/documents/papers/2024/24-05.pdf (application/pdf)

Related works:
Working Paper: Tax Incentives and Return Migration (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notgep:2024-05

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