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Taxes and Migration Flows: Preferential Tax Schemes for High-Skill Immigrants

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  • Pedro Teles
  • João Brogueira de Sousa

Abstract

We study preferential tax schemes for high-skill immigrants such as those adopted in Europe in the past two decades. The overall assessment is negative. While they induce a very large immigration surplus tilted towards the low-skill, they may also give rise to an emigration deficit that more than offsets the surplus. The unilateral adoption is ambiguous in its welfare effects for both high- and low-skill workers, but the multilateral adoption is unambiguous in redistributing from low-skill to high-skill workers.

Suggested Citation

  • Pedro Teles & João Brogueira de Sousa, 2023. "Taxes and Migration Flows: Preferential Tax Schemes for High-Skill Immigrants," Working Papers w202321, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w202321
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    References listed on IDEAS

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    1. Jacopo Bassetto & Giuseppe Ippedico, 2023. "Can Tax Incentives Bring Brains Back? Returnees Tax Schemes and High-Skilled Migration in Italy," CESifo Working Paper Series 10271, CESifo.
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    3. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2012. "The Impact Of Immigration On The Structure Of Wages: Theory And Evidence From Britain," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 120-151, February.
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