Income redistribution and self-selection of immigrants

Abstract We analyze the effects of governmental redistribution on migration patterns, using registry data that includes almost the universe of Italian citizens living abroad. Since Italy takes a middle ground in terms of redistribution, both the welfare-magnet effect and the propensity of high-skilled to settle in countries with lower taxes can be studied. Our findings confirm that destination countries with more redistribution receive a negative selection of Italian migrants. Policy simulations are run in order to gauge the magnitude of these effects. We find that sizable increases in redistribution in Italy have small effects on the skill composition of the resident population.