Does Emigration Drain Entrepreneurs?

71 Pages Posted: 22 Jun 2020

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

Giuseppe Ippedico

University of California, Davis - Department of Economics

Giovanni Peri

University of California, Davis - Department of Economics

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Abstract

Emigration of young, motivated individuals may deprive countries-of-origin of entrepreneurs. We isolate exogenous variation in a large emigration wave from Italy between 2008 and 2015 by interacting diaspora networks with economic pull factors in destination countries, and find that larger emigration rates reduced firm creation and innovative start-ups. We estimate that for every 100 emigrants, 26 fewer firms were created. An accounting exercise shows that 37 percent of the effect was due to the disproportionate loss of young people. The remaining effect was due to selection into emigration of highly entrepreneurial individuals, as well as negative spillovers on firm creation.

Keywords: emigration, demography, brain drain, entrepreneurship, innovation, EU integration

JEL Classification: J61, H7, O3, M13

Suggested Citation

Anelli, Massimo and Basso, Gaetano and Ippedico, Giuseppe and Peri, Giovanni, Does Emigration Drain Entrepreneurs?. IZA Discussion Paper No. 13390, Available at SSRN: https://ssrn.com/abstract=3631601

Massimo Anelli (Contact Author)

Bocconi University ( email )

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

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Gaetano Basso

Bank of Italy ( email )

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Giuseppe Ippedico

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

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Davis, CA 95616-8578
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Giovanni Peri

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

One Shields Drive
Davis, CA 95616-8578
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530-752-9382 (Fax)

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