The emigration of Italian citizen, mostly young people under the age of 45, increased sharply in the last decade. In a context of rapid population ageing, such phenomenon could negatively impact the creation of new firms, which is usually associated with the presence of a young and dynamic workforce. This paper empirically studies the relationship between emigration and firm creation net of local confounders that could lead to spurious correlation (e.g. the youth unemployment rate).
The results show that higher emigration is associated with a decline in the stock of firms owing to less firm creation. Such drop also affects firms whose owners and executives are less than 45 years old and startups operating in technologically advanced and innovative sectors. Most of the missing firm creation is due to a demographic factor (i.e. fewer young people) rather than to a decline in the entrepreneurship rate.
