Emigration and Entrepreneurial Drain

Anelli, Massimo; Basso, Gaetano; Ippedico, Giuseppe; Peri, Giovanni

Abstract

Emigration of young, highly educated individuals may deprive origin countries of entrepreneurs. We identify exogenous variation in emigration from Italy by interacting past diaspora networks and current economic pull factors in destination countries. We find that a 1 standard deviation increase in the emigration rate generates a 4.8 percent decline in firms' creation in the local labor market of origin. An accounting exercise decomposes the estimated effect into four components: subtraction of individuals with average entrepreneurial propensity, selection of young and college-educated among emigrants, negative spillovers on firm creation, and selection on unobservable characteristics positively associated with entrepreneurship.

Citation

Anelli, M., Basso, G., Ippedico, G., & Peri, G. (2023). Emigration and Entrepreneurial Drain. American Economic Journal: Applied Economics, 15(2), 218-252. https://doi.org/10.1257/app.20210194

• Journal Article Type: Article
• Acceptance Date: Jun 13, 2022
• Publication Date: Apr 1, 2023
• Deposit Date: Jul 4, 2024
• Publicly Available Date: Jul 4, 2024
• Journal: American Economic Journal: Applied Economics
• Print ISSN: 1945-7782
• Electronic ISSN: 1945-7790
• Publisher: American Economic Association
• Peer Reviewed: Peer Reviewed
• Volume: 15
• Issue: 2
• Pages: 218-252
• DOI: https://doi.org/10.1257/app.20210194
• Public URL: https://nottingham-repository.worktribe.com/output/27871728
• Publisher URL: https://www.aeaweb.org/articles?id=10.1257/app.20210194