On the taxing of migrants’ earnings while retaining a migrant workforce

We study policies that are aimed at retaining a migrant workforce in a Gulf State while introducing a tax on migrant earnings. We single out Qatar as a case study. We consider two types of migrants: target migrants, and non-target migrants. If migrants are target migrants, we show that in order to neutralize the effect of a tax on their earnings, Qatar needs to extend the length of time migrants are allowed to stay. Such a scheme can work even when the migrants experience utility loss from staying longer in Qatar. If migrants are non-target migrants, we show that implementation of a lottery scheme in which the prizes are life-long residency in Qatar can “compensate” for the imposition of the tax. In both cases, we present numerical examples that illustrate the magnitudes involved.


Issue Date:
Jul 13 2018
Publication Type:
Working or Discussion Paper
Record Identifier:
https://ageconsearch.umn.edu/record/275060
Language:
English
Total Pages:
11
JEL Codes:
C6; F22; J33; J41
Series Statement:
ZEF – Discussion Papers on Development Policy No. 263




 Record created 2018-07-13, last modified 2018-07-13

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