Global Migration of Talent and Tax Incentives : Evidence from Malaysia's Returning Expert Program
This paper presents the first evidence on the efficacy of a major program designed to encourage the return migration of high-skilled individuals. The Malaysian Returning Expert Program targets high-skilled Malaysians abroad and provides them with t...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/881411478027078856/Global-migration-of-talent-and-tax-incentives-evidence-from-Malaysias-returning-expert-program http://hdl.handle.net/10986/25675 |
| Summary: | This paper presents the first evidence
on the efficacy of a major program designed to encourage the
return migration of high-skilled individuals. The Malaysian
Returning Expert Program targets high-skilled Malaysians
abroad and provides them with tax incentives to return. At
several eligibility thresholds, the probability of
acceptance into the program increases discontinuously. Using
administrative data on applicants, the analysis is able to
identify the impact of acceptance to the Returning Expert
Program on the probability of returning to Malaysia. The
fuzzy regression discontinuity design estimates suggest that
program approval increases the return probability by 40
percent for applicants with a preexisting job offer in
Malaysia. There is no significant treatment effect for those
who apply without a job offer. The estimated migration
elasticity with respect to the net-of-tax rate, averaged
across all applicants, is 1.2. Fiscal cost-benefit analysis
of the Returning Expert Program finds a modest net fiscal
effect of the program, between minus $6,900 and plus $4,200
per applicant, suggesting that the program roughly pays for itself. |
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