Brain drain is a growing concern for many countries experiencing large emigration rates of their highly educated citizens. While several European countries have designed tax schemes to attract high-skilled expatriates and foreigners, there is limited empirical evidence on the effectiveness of fiscal incentives in a context of brain drain, and on migration responses to income tax differentials beyond top earners. In this paper we investigate the effects of the Italian 2010 tax scheme (“Controesodo”), which granted a generous income tax reduction to high-skilled expatriates who relocate to Italy. Eligibility required a college degree as well as being born in 1969 or later, which creates suitable quasi-experimental conditions to identify the effect of tax incentives. Using a Diff-in-Diff strategy and administrative data on return migration, we find that eligible individuals are 27-34% more likely to move back to Italy post-reform. Additionally, using social security data from the main origin country of returnees (Germany), we uncover effects along the whole wage distribution, showing that tax-induced migration is a broader phenomenon beyond top earners. A cost-benefit analysis reveals that the net fiscal impact of the tax scheme is marginally positive by targeting young and high-skilled individuals.  

The impact of school spending on student outcomes is an open question in the literature, with previous studies finding mixed evidence and rarely differentiating between types of spending. We study a EU funding scheme that allocated, between 2014 and 2020, more than 2 billion euros to Italian schools to realize a variety of educational projects. Combining data on individual-level standardized test scores with detailed information on projects' ranking in tenders and rollout timing, we estimate the effect of EU-funded projects on standardized test scores using RD and staggered DID designs. We find that schools marginally winning funds for education technologies increase standardized test scores, with larger investments yielding longer-lasting effects. Schools marginally winning funds for extra-curricular courses show no improvement on standardized test scores. However, focusing exclusively on participants in these courses, we find heterogenous effects on student outcomes.