Income Redistribution and Self-Selection of Immigrants

56 Pages Posted: 30 Apr 2019

See all articles by Giacomo Corneo

Giacomo Corneo

Free University of Berlin (FUB); Universität Osnabrück - Faculty of Business Administration - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Guido Neidhöfer

ZEW – Leibniz Centre for European Economic Research

Date Written: April 2019

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

JEL Classification: D31, H23

Suggested Citation

Corneo, Giacomo and Neidhöfer, Guido, Income Redistribution and Self-Selection of Immigrants (April 2019). CEPR Discussion Paper No. DP13694. Available at SSRN: https://ssrn.com/abstract=3379609

Giacomo Corneo (Contact Author)

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
D-10785 Berlin, Berlin 14195
Germany

Universität Osnabrück - Faculty of Business Administration - Department of Economics ( email )

Rolandstr. 8
Osnabrueck, D-49069
Germany
+49 541 969 2730 (Phone)
+49 541 969 2722 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Guido Neidhöfer

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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