Youth Drain, Entrepreneurship and Innovation

65 Pages Posted: 14 Aug 2019

See all articles by Massimo Anelli

Massimo Anelli

Bocconi University; CESifo; IZA; Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics; Fondazione Rodolfo DeBenedetti

Gaetano Basso

Bank of Italy; Fondazione Rodolfo Debenedetti

Giuseppe Ippedico

University of California, Davis - Department of Economics

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: July 2019

Abstract

Migration outflows, especially of young people, may deprive an economy of entrepreneurial energy and innovative ideas. We exploit exogenous variation in emigration from Italian local labor markets to show that between 2008 and 2015 larger emigration flows reduced firm creation. The decline affected firms owned by young people and innovative industries. We estimate that for every 1,000 emigrants, 10 fewer young-owned firms were created over the whole period. A simple accounting exercise shows that about 60 percent of the effect is generated simply by the loss of young people; the remaining 40 percent is due to a combination of selection of emigrants among highly entrepreneurial people, negative spillovers on the entrepreneurship rate of locals, and negative local firm multiplier effect.

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Suggested Citation

Anelli, Massimo and Basso, Gaetano and Ippedico, Giuseppe and Peri, Giovanni, Youth Drain, Entrepreneurship and Innovation (July 2019). NBER Working Paper No. w26055. Available at SSRN: https://ssrn.com/abstract=3419904

Massimo Anelli (Contact Author)

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Bocconi University - DONDENA - Carlo F. Dondena Centre for Research on Social Dynamics ( email )

Via Roentgen 1
Milan, 20136
Italy

Fondazione Rodolfo DeBenedetti ( email )

Via Roentgen 1,
Room 5.C1-11
Milan, Milano 20136
Italy

HOME PAGE: http://www.frdb.org

Gaetano Basso

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Fondazione Rodolfo Debenedetti ( email )

Via Roentgen 1,
Room 5.C1-11
Milan, Milano 20136
Italy

Giuseppe Ippedico

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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