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Return Migration and Saving Behavior of Foreign Workers in Germany

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  • Murat G. Kirdar

    ()
    (Department of Economics, METU)

Abstract

In this paper, I develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on legal immigrants in Germany. The model gives a number of implications about the level, timing and selection of return migration as well as asset accumulation of immigrants according to their country of origin We also calculate the net lifetime contributions of immigrants to the pension and unemployment insurance systems of the host country. The estimated model is used to determine the impact of a number of counterfactual policy experiments on the return and savings behavior of immigrants as well as on their net contribution to the social security system. These counterfactuals include changes in the unemployment insurance program, payment of bonuses to selected groups to encourage return home, and exchange rate premiums by the source countries. In addition, I assess the impact of counterfactuals in the macroeconomic environment, like changes in wages in Germany and in purchasing power parity between Germany and the source countries.

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File URL: http://www.erc.metu.edu.tr/menu/series05/0506.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0506.

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Length: 69 pages
Date of creation: Nov 2005
Date of revision: Nov 2005
Handle: RePEc:met:wpaper:0506

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Related research

Keywords: International Migration; Unemployment Insurance; Life Cycle Models and Saving; Public Policy;

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References

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  4. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
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  13. Murat G. Kirdar, 2004. "An Estimable Dynamic Model of Asset Accumulation and Return Migration," ERC Working Papers 0416, ERC - Economic Research Center, Middle East Technical University, revised Dec 2004.
  14. Axel Borsch-Supan & Reinhold Schnabel, 1997. "Social Security and Retirement in Germany," NBER Working Papers 6153, National Bureau of Economic Research, Inc.
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  18. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
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Citations

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Cited by:
  1. Murat G. Kirdar, 2007. "Labor Market Outcomes, Capital Accumulation, and Return Migration: Evidence from Immigrants in Germany," ERC Working Papers 0703, ERC - Economic Research Center, Middle East Technical University, revised Jan 2007.
  2. Kirdar, Murat, 2007. "Labor market outcomes, capital accumulation, and return migration: Evidence from immigrants in Germany," MPRA Paper 2028, University Library of Munich, Germany.

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