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Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration

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Author Info
Oded Stark
Christian Helmenstein
Yury Yegorov
Abstract

If some of the returns to migration accrue from returnmigration, the optimal duration of migration may be shorter thanthe feasible duration of migration. We develop a model that providesand highlights conditions under which return migration takesplace even though a reversal of the inter-country wage differentialdoes not occur. In particular, we consider the higher purchasingpower of savings (generated from work abroad) at home than abroadas a motive for return migration. Inter alia, our model producesa negative relationship between the optimal duration of migrationand the purchasing power differential and in some (but not all)cases, a negative relationship between the optimal duration ofmigration and the wage abroad. In addition, and contrary to ourprior anticipation, our utility maximization analysis suggeststhat East-West migration will tend to be temporary while inter-EuropeanCommunity (or intra-West European) migration will likely be permanent. Copyright Kluwer Academic Publishers 1997

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File URL: http://hdl.handle.net/10.1023/A:1008616421523
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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 4 (1997)
Issue (Month): 3 (July)
Pages: 307-324
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Handle: RePEc:kap:itaxpf:v:4:y:1997:i:3:p:307-324

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  1. George J. Borjas & Bernt Bratsberg, 1994. "Who Leaves? The Outmigration of the Foreign-Born," NBER Working Papers 4913, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Kimball, Miles S, 1993. "Standard Risk Aversion," Econometrica, Econometric Society, vol. 61(3), pages 589-611, May. [Downloadable!] (restricted)
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  3. Pratt, John W & Zeckhauser, Richard J, 1987. "Proper Risk Aversion," Econometrica, Econometric Society, vol. 55(1), pages 143-54, January. [Downloadable!] (restricted)
  4. Stark, Oded, 1995. " Return and Dynamics: The Path of Labor Migration When Workers Differ in Their Skills and Information Is Asymmetric," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(1), pages 55-71, March.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bellemare, C., 2003. "Economic assimilation and outmigration of immigrants in West-Germany," Discussion Paper 65, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Cobb-Clark, Deborah & Stillman, Steven, 2008. "Emigration and the Age Profile of Retirement among Immigrants," IZA Discussion Papers 3874, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Amin, Mohammad & Mattoo, Aaditya, 2005. "Does temporary migration have to be permanent?," Policy Research Working Paper Series 3582, The World Bank. [Downloadable!]
  4. Kirdar, Murat, 2009. "Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions," MPRA Paper 13322, University Library of Munich, Germany. [Downloadable!]
  5. Gang, Ira N. & Bauer, Thomas K., 1998. "Temporary Migrants From Egypt: How Long Do They Stay Abroad?," IZA Discussion Papers 03, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Ira N. Gang & Catherine Y. Co & Myeong-Su Yun, 1999. "Returns to Returning," Departmental Working Papers 199813, Rutgers University, Department of Economics. [Downloadable!]
    Other versions:
  7. Fischer, Peter A. & Holm, Einar & Malmberg, Gunnar & Straubhaar, Thomas, 2000. "Why do People Stay? Insider Advantages and Immobility," Discussion Paper Series 26310, Hamburg Institute of International Economics. [Downloadable!]
  8. Yasmeen Khwaja, 2002. "Should I Stay or Should I Go? Migration under Uncertainty: A Real Options Approach," Public Policy Discussion Papers 02-10, Economics and Finance Section, School of Social Sciences, Brunel University. [Downloadable!]
  9. Ira N. Gang & Thomas Bauer, 2000. "Return Migrants From Egypt: How Long Did They Stay Abroad?," Departmental Working Papers 199811, Rutgers University, Department of Economics. [Downloadable!]
  10. Yasmeen Khwaja, 2002. "Should I Stay or Should I Go? Migration under Uncertainty: A Real Options Approach," Economics and Finance Discussion Papers 02-10, Economics and Finance Section, School of Social Sciences, Brunel University. [Downloadable!]
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