Returning Brains:Tax Incentives, Migration, and Scientific Productivity

88 Pages Posted: 8 Apr 2024

Date Written: October 23, 2022

Abstract

This paper investigates how tax incentives for high-skill immigrants affect productivity. I collect data covering 90 percent of Italian faculty between 2000 and 2020 and use it to evaluate a 2004 tax break targeting researchers. First, the program induced substantial migration and positive selection of beneficiaries. Second, higher-productivity hires increase their department's average productivity by 0.116 SDs, evenly split between their direct contribution and indirect responses of local faculty. However, this indirect effect is largely explained by the subsequent inflow of higher-productivity local researchers. Third, productivity spillovers on incumbent researchers are heterogeneous, but modest (0.024 SDs) and insignificant on average.

JEL Classification: H24, J24, J48

Suggested Citation

Creanza, Pier Paolo, Returning Brains:Tax Incentives, Migration, and Scientific Productivity (October 23, 2022). Available at SSRN: https://ssrn.com/abstract=4752845 or http://dx.doi.org/10.2139/ssrn.4752845

Pier Paolo Creanza (Contact Author)

Princeton University ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.ppcreanza.com

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