DP18414 Taxes and Migration Flows: Preferential Tax Schemes for High-Skill Immigrants
We study preferential tax schemes for high-skill immigrants such as those adopted in Europe in the past two decades. The assessment is very negative. While they induce an immigration surplus tilted towards the low-skill, they also give rise to an emigration deficit, that may more than offset the surplus. We find that the unilateral adoption tends to hurt both low- and high-skill workers while the multilateral adoption redistributes from low-skill to high-skill workers.