Abstract

We study the impact of a policy change in the Netherlands that reduced
preferential tax treatment duration for high-skilled migrants arriving from specific countries in certain years. Utilizing comprehensive tax and population data, we document substantial tax-induced emigration responses, primarily driven by the top 1% of earners. Highly mobile individuals within the top 5% also emigrate sooner, particularly to competing countries offering tax-breaks to attract skilled workers. Crucially, we uncover no change in mobility behavior among lower-earning workers. The increased tax receipts from lower-income individuals who remain offset the loss from fleeing high earners, making the policy fiscally cost-neutral.
Original languageEnglish
Place of PublicationAmsterdam
PublisherTinbergen Institute
Number of pages70
Publication statusPublished - 18 Sept 2023

Publication series

SeriesTinbergen Institute Discussion Papers
Number23-053/V

JEL classifications

  • f22 - International Migration
  • h31 - Fiscal Policies and Behavior of Economic Agents: Household
  • j61 - "Geographic Labor Mobility; Immigrant Workers"

Keywords

  • Taxation
  • immigration,
  • labor income
  • Netherlands

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