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Income redistribution and self-selection of immigrants

Giacomo Corneo and Guido Neidhöfer ()

No 19-019, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We analyze the effects of governmental redistribution of income on migration patterns,using an Italian administrative dataset that includes information on 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. This holds true after accounting for many individual and country level covariates, migration costs, and when testing for stochastic dominance of the skill distributions of migrants and stayers. Policy simulations are run in order to gauge the magnitude of these 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: Roy-Model; Self-selection; Migration; Redistribution (search for similar items in EconPapers)
JEL-codes: D31 F22 H23 J61 O15 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-eur, nep-int, nep-lab and nep-ure
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Working Paper: Income redistribution and self-selection of immigrants (2019) Downloads
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