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RFBerlin Discussion Paper No. 097/26\u003Cbr>Access |\n| Papers can be downloaded free of charge from the RFBerlin website: [https://www.rfberlin.com/discussion-papers](https://www.rfberlin.com/discussion-papers)\u003Cbr>Discussion Papers of RFBerlin are indexed on RePEc: [https://ideas.repec.org/s/crm/wpaper.html](https://ideas.repec.org/s/crm/wpaper.html)\u003Cbr>Disclaimer |\n\nOpinions and views expressed in this paper are those of the author(s) and not those of RFBerlin. Research disseminated in this discussion paper series may include views on policy, but RFBerlin takes no institutional policy positions. RFBerlin is an independent research institute.  \nRFBerlin Discussion Papers often represent preliminary or incomplete work and have not been peer-reviewed. Citation and use of research disseminated in this series should take into account the provisional nature of the work. Discussion papers are shared to encourage feedback and foster academic discussion.  \nAll materials were provided by the authors, who are responsible for proper attribution and rights clearance. While every effort has been made to ensure proper attribution and accuracy, should any issues arise regarding authorship, citation, or rights, please contact RFBerlin to request a correction.  \nThese materials may not be used for the development or training of artificial intelligence systems.  \nTax Incentives and Return Migration *  \nJacopo Bassetto Giuseppe Ippedico  \nUniversity of Milan, IAB, RF Berlin University of Nottingham, CESifo, IZA, RF Berlin  \nFebruary 2026  \nLATEST VERSION AVAILABLE HERE  \nAbstract  \nWe study how tax incentives affect the return migration of high-skilled expatriates to their home country, exploiting a generous income tax break for returnees in Italy. Using administrative data and a Triple-Difference design, we estimate a migration elasticity to the average net-of-tax rate just below one. Responses are sizable across the upper half of the earnings distribution, indicating that tax-induced migration is not limited to top earners. A cost-benefit analysis reveals that, while costly in the short term, the scheme pays for itself in present value if a sufficiently large fraction of returnees remains after the scheme elapses.  \nJEL Codes: F22, H24, H31, J61  \n* Bassetto: [jacopo.bassetto@unimi.it](jacopo.bassetto@unimi.it) ; Ippedico: [giuseppe.ippedico@nottingham.ac.uk](giuseppe.ippedico@nottingham.ac.uk) (corresponding author). This paper was previously circulated as “Can Tax Incentives Bring Brains Back? Returnees Tax Schemes and High Skilled Migration in Italy”. We are grateful to the editor Stephen Terry and to four anonymous referees for their insightful comments. We thank Silke Anger, Santiago Pérez, Giovanni Peri, Enrico Rettore and Monica Singhal for their feedback, as well as Juho Alasalmi, Carlo Alcaraz, Marco Bertoni, Marianne Bitler, Breno Braga, Theresa Bührle, Andrea Cerrato, Sophie Cottet, Ben Elsner, Giovanni Facchini, Simone Ferro, Francesco Filippucci, Dirk Foremny, Tommaso Frattini, David Jaeger, Rachel Jones, Ninghui Li, Diana Moreira, Enrico Moretti, Kurt Schmidheiny, Ashish Shenoy, Silvia Vannutelli, and participants to the CESifo Area Public Economics, IIPF, ZEW Taxation and Mobility workshop, EUTAX workshop, SIEP, SOLE, All-California Labor Economics, EALE, Stanford SITE Migration, CEMIR Junior Workshop on Migration, Immigration in OECD countries, Inequality in Rome, St. Andrews, Nottingham, San Diego State, and UC Davis. Jacopo Bassetto gratefully acknowledges financial support f","cbCaisKCYMbzoyo5","https://ap.wps.com/l/cbCaisKCYMbzoyo5","pdf",4284670,88,"English","# Abstract\n# Introduction\n## Background and policy context\n## Research question and policy design\n## Identification strategy","[{\"question\":\"How do the authors measure the impact of tax incentives on return migration?\",\"answer\":\"They use administrative data and a Triple-Difference design tied to Italy’s preferential return tax scheme and eligibility rules.\"},{\"question\":\"What is the estimated migration responsiveness to changes in the net-of-tax rate?\",\"answer\":\"The study estimates a migration elasticity to the average net-of-tax rate just below one.\"},{\"question\":\"Do tax-induced return responses apply only to top earners?\",\"answer\":\"No. Responses are sizable across the upper half of the earnings distribution, suggesting effects beyond the highest earners.\"}]","Tax Incentives and Return Migration | PDF",1789979976,222]