Ciclo de Seminarios Permanentes del Departamento de Economía

Income Redistribution and Self-Selection of Immigrants
con Giacomo Corneo

Abstract: The Roy-Model of income maximization predicts that countries with a more progressive tax and transfer system attract low skilled immigrants, while low redistribution is associated with inflows of high skilled immigrants. We test the model using administrative data on almost all Italian citizens registered as living abroad. Our results confirm the predictions of the model, even accounting for individual and country level covariates, migration costs, and testing for stochastic dominance between the skill distributions of migrants and stayer. However, our simulation of a redistributive reform of substantial fiscal impact in the source country shows a significant effect on the selection patterns of migration, but a rather limited one on the total number of people relocating. Our analysis sheds also light on the determinants of migration decisions and selection of immigrants.

Key words: Roy-Model, Self-selection, Migration, Redistribution.