The 30%-rule for expats: impact on immigration and wages

Dit project heeft in 2020 een ODISSEI Microdata Access Grant (MAG) ontvangen.

Projectaanvragers: prof. dr. Massimo Giuliodori (UvA-FEB) and dr. Paul Muller (VU Amsterdam).

Project abstract

Immigrants that relocate to the Netherlands with the purpose of starting employment that requires skills that are scarce in the Dutch labor force, benefit from a substantial reduction in income taxation. Such tax benefits have existed since the 50’s in the Netherlands, though the details have continuously changed. Currently, the rule implies that 30% of the employee’s wage is exempt from income tax for a period of at most 8 years.

This project will evaluate the implications of the 30% tax rule on immigration and wage formation. More specifically, this research aims to provide insights in how effective tax exemptions are in attracting immigrants, how they affect the duration of immigrants’ stay in the Netherlands and how they affect the wages earned by immigrants. Each of these questions is crucial in understanding how optimal policy should be shaped.

Conducting research with CBS microdata

Statistics Netherlands (CBS) collects a wide range of data for its statistical tasks, many of them microdata at the level of individual persons or organisations. Protection of the confidentiality of the data has the highest priority for CBS. Within strict safety conditions however, universities and other authorized research institutes can get Remote Access to such data to perform statistical analyses for their own scientific or statistical purposes. The microdata themselves remain strictly within a secure environment within CBS. Under applicable conditions researcher can also bring in additional dataset to be linked with CBS microdata. Before aggregate statistical results are exported from the secured environment, CBS will check whether these results do not contain any risk for disclosure of information on individual persons or organisations.

Read more about using microdata within the CBS Remote Access Environment.

Photo by Bruno /Germany via Pixabay.