Economic change and innovation are often embodied in young generations who bring new ideas and transform the productive and organizational structure of companies. What happens to an economy if the cohort of young people, and especially the highly educated among them, shrinks signiﬁcantly in size? In this paper we exploit a sudden increase in emigration of young and educated Italian citizens during the period 2010-2015 and analyze its effects on ﬁrm creation, local productivity and innovation. As the emigration decision are themselves partly driven by local economic conditions, we isolate the “pull-driven” component in the wave of migrants to reduce endogeneity and omitted variable issues. We combine this information with detailed ﬁrm-level data on the universe of Italian ﬁrms and ﬁnd that youth emigration is associated with lower ﬁrm creation, decline in skill intensity in the local economy and fewer innovative startups.
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PhD Student, Department of Economics, UC Davis
Giuseppe is a second-year graduate student in the Economics department. He holds a MSc from Bocconi University where he graduated in 2017. His research interests include labor economics, migrations and education.