NBER

Giuseppe Ippedico

Department of Economics
University of California Davis
One Shields Avenue
Davis, CA 95616

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: UC Davis

NBER Working Papers and Publications

July 2019Youth Drain, Entrepreneurship and Innovation
with Massimo Anelli, Gaetano Basso, Giovanni Peri: w26055
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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