On the taxing of migrants' earnings while retaining a migrant workforce

Oded Stark and Wiktor Budzinski

No 107, University of Tübingen Working Papers in Business and Economics from University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics

Abstract: We study policies that are aimed at retaining a migrant workforce in a Gulf State while introducing a tax on migrant earnings. We single out Qatar as a case study. We consider two types of migrants: target migrants, and non-target migrants. If migrants are target migrants, we show that in order to neutralize the effect of a tax on their earnings, Qatar needs to extend the length of time migrants are allowed to stay. Such a scheme can work even when the migrants experience utility loss from staying longer in Qatar. If migrants are non-target migrants, we show that implementation of a lottery scheme in which the prizes are life-long residency in Qatar can "compensate" for the imposition of the tax. In both cases, we present numerical examples that illustrate the magnitudes involved.

Keywords: Migration; Taxing migrants; Target migrants; Non-target migrants (search for similar items in EconPapers)
JEL-codes: C6 F22 J33 J41 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-mig
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Journal Article: On the taxing of migrants' earnings while retaining a migrant workforce (2018)
Working Paper: On the taxing of migrants’ earnings while retaining a migrant workforce (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuewef:107

DOI: 10.15496/publikation-24166

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