NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Youth Drain, Entrepreneurship and Innovation

Massimo Anelli, Gaetano Basso, Giuseppe Ippedico, Giovanni Peri

NBER Working Paper No. 26055
Issued in July 2019
NBER Program(s):Labor Studies Program, Productivity, Innovation, and Entrepreneurship Program

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, 10 fewer young-owned firms were created 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.

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Document Object Identifier (DOI): 10.3386/w26055

 
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