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Youth Drain Entrepreneurship and Innovation

Author

Listed:
  • Massimo Anelli

    (Bocconi Univerity)

  • Gaetano Basso

    (Bank of Italy)

  • Giuseppe Ippedico

    (University of California, Davis)

  • Giovanni Peri

    (University of California, Davis)

Abstract

Migration outflows, especially of young people, may deprive an economy of entrepreneurial energy and innovative ideas. We exploit exogenous variation in emigration from Italian local labor markets to show that between 2008 and 2015 larger emigration flows reduced firm creation. The decline affected firms owned by young people and innovative industries. We estimate that for every 1,000 emigrants, 100 fewer young-owned firms were created cumulatively over the whole period. A simple accounting exercise shows that about 60 percent of the effect is generated simply by the loss of young people; the remaining 40 percent is due to a combination of selection of emigrants among highly entrepreneurial people, negative spillovers on the entrepreneurship rate of locals, and negative local firm multiplier effect.

Suggested Citation

  • Massimo Anelli & Gaetano Basso & Giuseppe Ippedico & Giovanni Peri, 2019. "Youth Drain Entrepreneurship and Innovation," Temi di discussione (Economic working papers) 1240, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1240_19
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    References listed on IDEAS

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    Cited by:

    1. Laurent Bossavie & Çağlar Özden, 2023. "Impacts of Temporary Migration on Development in Origin Countries," The World Bank Research Observer, World Bank Group, vol. 38(2), pages 249-294.

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    More about this item

    Keywords

    emigration; demography; brain drain; entrepreneurship; innovation;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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