TAX-INDUCED MIGRATION OF TOP INCOMES: Evidence from the market for European footballers

Football players’ migration patterns are sensitive to differences in tax rates among European countries and regions. This is the by-product of the changes in the net benefits that teams and players obtain from their matches. Lower tax rates can improve leagues’ overall quality by attracting more top-quality players. At the same time, this may displace low-quality ones, inhibiting them to avoid high taxation rates

These are among the findings of research by Cristian Usala and Rinaldo Brau, presented at the first virtual congress of the European Economic Association in August 2020. 

By using data on the European football market and top marginal taxation, their study applies an innovative technique that makes it possible to account explicitly for the role played by employers (football teams) in the work mobility of employees (footballers).

The authors conclude that this approach may be used in different contexts to better understand the size and heterogeneity of top incomes’ sensitivity to marginal taxation.


In an environment with low migration costs and relevant tax rate differentials among countries, the migration of top incomes is a crucial policy issue. When deciding their fiscal policy, governments have to consider that higher tax rates result in an outflow of highly productive workers, with a related reduction in fiscal revenues and country’s attractiveness.

The key question on how sensitive are the migration choices of top-incomes to income taxation is addressed by analysing data on footballers’ careers and top tax rates in 16 countries between 2007 and 2016. The authors focus on the football market for two specific reasons:

  • European footballers are top incomes for which the data are easily available.
  • Footballers are more mobile than other workers. This provides an upper bound on the mobility response of the entire labour market.


Footballers’ data are obtained from, one of the most important online communities of football supporters providing various information on players and teams. These data are paired with detailed information on taxation at the national and local levels and special rules aimed at attracting foreigners with preferential tax schemes.

Footballers’ sensitivity to taxation is estimated by applying the Maximum Score Matching approach. Each observed team-player match is considered the outcome of a matching process where agents compete with each other to match with their preferred partners.

This technique is robust to lack of information on wages and agent-specific characteristics and, differently from previous approaches, accounts for the role played by firms in influencing workers’ location decisions. The results of this approach are exploited to simulate various scenarios with different assumptions regarding the dimension of labour demand.

Main findings:

  • The role of marginal taxation incentives is confirmed in a context of matching between demand and supply. In an elastic labour demand scenario, a 1% reduction in tax rate increases the number of players by around 0.2%. This result is associated with an optimal tax rate of 82%.
  • Foreigners are more sensitive than natives: a 1% decrease in tax rates increases the population of foreigners between 1.20% and 1.37% and the population of natives between 0.11% and 0.7%. 
  • Top players are more sensitive than low-quality ones. In particular, in a context of rigid demand, a reduction in tax rate may improve the quality of the league by attracting top players who displace low-quality ones.


The authors conclude that their approach has proved to be effective in analysing the phenomenon of tax-induced migration and may be used in different contexts and markets such as CEOs, academic professors and inventors.

Cristian Usala and Rinaldo Brau, University of Cagliari and CRENoS.

Contact details:

Cristian Usala

University of Cagliari and CRENoS, Italy

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