The Review of Economics and Statistics 2026
Tax Incentives and Return Migration
Abstract
We study how tax incentives affect the return migration of high-skilled expatriates to their home country, exploiting a generous income tax break for returnees in Italy. Using administrative data and a Triple-Difference design, we estimate a migration elasticity to the average net-of-tax rate just below one. Responses are sizable across the upper half of the earnings distribution, indicating that tax-induced migration is not limited to top earners. A cost-benefit analysis reveals that, while costly in the short term, the scheme pays for itself in present value if a sufficiently large fraction of returnees remains after the scheme elapses.
- DOI
- 10.1162/rest.a.1876
- Pages
- 1-46
- Language
- en
- Sources
- crossref