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Taxation and International Mobility of Superstars: Evidence from the European Football Market ∗ Henrik Jacobsen Kleven, London School of Economics

By Emmanuel Saez and Uc Berkeley


This paper analyzes the effects of top earnings tax rates on the migration decisions of football players across European countries. We construct a panel data set of top earnings tax rates and football players in the first leagues of 14 European countries since 1980. We identify the effects of top earnings tax rates on migration using various tax and institutional changes: (a) the 1995 Bosman ruling which liberalized the European football market, (b) top tax rate reforms within countries, and (c) country specific tax provisions offering lower tax rates for immigrant football players. We provide both case study analyzes and a structural mobility model estimated using all the data and sources of variation simultaneously. Both approaches show that the level of top earnings tax rates has a large and significant impact on the migration decisions of football players, especially after the 1995 Bosman ruling. Specific tax reductions for immigrants also have large impacts on location decisions with an elasticity of the probability of playing in a foreign country with respect to its net-of-tax rate on earnings around 0.5 and above 1 for younger players and top quality players. The large tax induced migration effects we uncover translate into significant effects in the performance of football clubs across countries. We are grateful to Filip Rozsypal and Ben Eisenpress for outstanding research assistance. We thank Clau

Year: 2009
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