The Economic Effects of Youth Drain
November 29, 2018
Economics grad student Giuseppe Ippedico examined the impacts of the exodus on Italian cities due to prolonged periods of slow growth, and found negative effects on the cities with the highest rates of out-migration. The challenge is to find Italian cities that are otherwise comparable but have different rates of educated youth out-migration in order to measure the effects of differential rates of out-movement on those who did not move.
Lu's Comments (Summary)
The argument for this paper is intuitive. If most college graduates in the city of Davis suddenly leave, this exodus would have a negative economic impact on the city. The empirical challenge is to demonstrate the reverse story does not hold: negative impact causes most college graduates to leave. The authors use an instrument variable of “pull factors” prior to the economic recession to measure the effects of youth drain on the Italian economy, and conclude there is a negative effect on economic outcomes.