International Mobility of the Wealthy in an Age of Growing Inequality

Abstract

The global economy and society are affected by the rising inequality in income and wealth along with an increasing frequency and severity of financial crises, tendencies for protectionism, and fragmented globalization. A largely unexplored topic in migration analysis is the international mobility of the wealthy and their assets, looking for countries that offer financial security, lower taxation, good educational facilities, safe cities, and other amenities. This mobility is largely motivated by [an] increasing concentration of wealth and incomes toward the top 1 or 0.1 percent in several economies and the search for diversification of newly created wealth. Some economies that are home of the wealthy are affected by political instability insecurity and weak property rights, prompting them to leave. Outflows of the wealthy and their assets have various consequences on both home and receiving nations such as a reduction of reduce tax revenues in the home country, an increase in property prices in the receiving nations, and is creating as well as the creation of a whole (legal) industry granting passports, residence, and citizenship oriented to the wealthy. This paper provides an overview of these trends backed by available empirical information. Main substantive topics include (a) identifying the main motivations of for the international mobility of the wealthy including “pulling” and “pushing” factors; (b) similarities and differences between the migration of wealthy individuals and the mobility of their assets (offshore wealth) towards low-tax jurisdictions and fiscal paradises; (d) the emergence of a “market” for passports, residence permits, and citizenship rights catered to the very wealthy.