IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/13322.html
   My bibliography  Save this paper

Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions

Author

Listed:
  • Kirdar, Murat

Abstract

This paper examines how immigrants' migration duration and saving decisions in the host country respond to changes in purchasing power parity (ppp) as well as in the wage ratio between the host and source countries. For this purpose, I develop a model of immigrants' joint migration duration and saving decisions and derive comparative static results regarding the impact of ppp and wage ratio on these decisions. An interesting implication of the theoretical model is that immigrants may in fact stay longer in the host country as a result of an increase in ppp, in particular those with a low degree of relative risk aversion. I test the implications of this model using a longitudinal data set that includes immigrants from four different source countries in Germany and employing panel data estimation methods. The empirical results reveal that an increase in ppp decreases the optimal migration duration. Moreover, optimal migration duration is elastic with respect to ppp. An interesting empirical finding is that, holding individual immigrant characteristics constant, immigrants from poorer source countries have a shorter migration duration than immigrants from wealthier source countries. The empirical results also reveal that ppp has a positive effect on saving rate, which is consistent with the implications of the model, and that saving rate is also elastic with respect to ppp.

Suggested Citation

  • Kirdar, Murat, 2009. "Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions," MPRA Paper 13322, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13322
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/13322/1/MPRA_paper_13322.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hatton, Tim & Williamson, Jeffrey G., 2002. "What Fundamentals Drive World Migration?," CEPR Discussion Papers 3559, C.E.P.R. Discussion Papers.
    2. Oded Stark & Christian Helmenstein & Yury Yegorov, 1997. "Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(3), pages 307-324, July.
    3. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    4. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    5. repec:zbw:rwidps:0029 is not listed on IDEAS
    6. Abdurrahman Aydemir & Chris Robinson, 2008. "Global labour markets, return, and onward migration," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1285-1311, November.
    7. Galor, Oded & Stark, Oded, 1990. "Migrants' Savings, the Probability of Return Migration and Migrants' Performance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 463-467, May.
    8. George J. Borjas & Bernt Bratsberg, 2021. "Who Leaves? The Outmigration Of The Foreign-Born," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 5, pages 93-104, World Scientific Publishing Co. Pte. Ltd..
    9. Guillermina Jasso & Mark Rosenzweig, 1982. "Estimating the emigration rates of legal immigrants using administrative and survey data: The 1971 cohort of immigrants to the United States," Demography, Springer;Population Association of America (PAA), vol. 19(3), pages 279-290, August.
    10. Thomas Bauer & Mathias Sinning, 2011. "The savings behavior of temporary and permanent migrants in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 421-449, April.
    11. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
    12. Robert M. Sauer, 2004. "Educational Financing and Lifetime Earnings," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(4), pages 1189-1216.
    13. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    14. Dustmann, Christian & Kirchkamp, Oliver, 2002. "The optimal migration duration and activity choice after re-migration," Journal of Development Economics, Elsevier, vol. 67(2), pages 351-372, April.
    15. Kumcu, M. Ercan, 1989. "The savings behavior of migrant workers : Turkish workers in W. Germany," Journal of Development Economics, Elsevier, vol. 30(2), pages 273-286, April.
    16. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
    17. KIrdar, Murat G., 2009. "Labor market outcomes, savings accumulation, and return migration," Labour Economics, Elsevier, vol. 16(4), pages 418-428, August.
    18. Dustmann, Christian & Frattini, Tommaso, 2011. "Immigration: The European Experience," IZA Discussion Papers 6261, Institute of Labor Economics (IZA).
    19. Djajic, Slobodan, 1989. "Migrants in a guest-worker system : A utility maximizing approach," Journal of Development Economics, Elsevier, vol. 31(2), pages 327-339, October.
    20. Goeree, Jacob K. & Holt, Charles A. & Palfrey, Thomas R., 2003. "Risk averse behavior in generalized matching pennies games," Games and Economic Behavior, Elsevier, vol. 45(1), pages 97-113, October.
    21. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sylvie Démurger & Hui Xu, 2011. "Left-Behind Children and Return Decisions of Rural Migrants in China," Post-Print halshs-00625636, HAL.
    2. Slobodan Djajić, 2009. "On the welfare implications of temporary and permanent immigration," Bank i Kredyt, Narodowy Bank Polski, vol. 40(5), pages 49-60.
    3. Abarcar, Paolo, 2017. "The return motivations of legal permanent migrants: Evidence from exchange rate shocks and immigrants in Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 62-77.
    4. Djajić, Slobodan & Vinogradova, Alexandra, 2015. "Overshooting the Savings Target: Temporary Migration, Investment in Housing and Development," World Development, Elsevier, vol. 65(C), pages 110-121.
    5. Alexandra Vinogradova, 2016. "Illegal immigration, deportation policy, and the optimal timing of return," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 781-816, July.
    6. Hera Susanti & Arie Damayanti, 2015. "Determinants of Internal Migration in Indonesia," Working Papers in Economics and Business 201505, Faculty of Economics and Business, University of Indonesia, revised Oct 2015.
    7. Slobodan Djajić, 2013. "Some Essentials Of A Workable Guest‐Worker Program," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 739-766, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. KIrdar, Murat G., 2009. "Labor market outcomes, savings accumulation, and return migration," Labour Economics, Elsevier, vol. 16(4), pages 418-428, August.
    2. Murat G. Kirdar, 2012. "Estimating The Impact Of Immigrants On The Host Country Social Security System When Return Migration Is An Endogenous Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 453-486, May.
    3. Deborah Cobb-Clark & Steven Stillman, 2008. "Emigration and the Age Profile of Retirement Among Immigrants," RF Berlin - CReAM Discussion Paper Series 0815, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    4. Akay, Alpaslan & Brausmann, Alexandra & Djajić, Slobodan & Kırdar, Murat G., 2021. "Purchasing-power-parity and the saving behavior of temporary migrants," European Economic Review, Elsevier, vol. 134(C).
    5. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
    6. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
    7. Daniel Makina, 2014. "Determinants of Migrants’ Savings in the Host Country: Empirical Evidence of Migrants living in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 6(1), pages 68-74.
    8. 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.
    9. Jackline Wahba, 2014. "Return migration and economic development," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 12, pages 327-349, Edward Elgar Publishing.
    10. Tiwari, Smriti, 2021. "Do macroeconomic fluctuations at destination matter in determining migrants’ return decisions?," World Development, Elsevier, vol. 148(C).
    11. Akay, Alpaslan & Brausmann, Alexandra & Djajic, Slobodan & Kirdar, Murat Güray, 2018. "Purchasing-Power-Parity and the Saving Behavior of Temporary Migrants," IZA Discussion Papers 11679, Institute of Labor Economics (IZA).
    12. Sílvio Rendon & Alfredo Cuecuecha, 2010. "International job search: Mexicans in and out of the US," Review of Economics of the Household, Springer, vol. 8(1), pages 53-82, March.
    13. Murat G. Kirdar, 2005. "Return Migration and Saving Behavior of Foreign Workers in Germany," ERC Working Papers 0506, ERC - Economic Research Center, Middle East Technical University, revised Nov 2005.
    14. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.
    15. Philippe De Vreyer & Flore Gubert & Anne-Sophie Robilliard, 2010. "Are There Returns to Migration Experience? An Empirical Analysis using Data on Return Migrants and Non-Migrants in West Africa," Annals of Economics and Statistics, GENES, issue 97-98, pages 307-328.
    16. Anda David & Mohamed Ali Marouani, 2013. "The Impact of Labor Mobility on Unemployment: A Comparison between Jordan and Tunisia," Working Papers 823, Economic Research Forum, revised Dec 2013.
    17. repec:dau:papers:123456789/14987 is not listed on IDEAS
    18. Murat Kırdar, 2013. "Source country characteristics and immigrants’ optimal migration duration decision," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    19. Kirdar, Murat, 2007. "Labor market outcomes, capital accumulation, and return migration: Evidence from immigrants in Germany," MPRA Paper 2028, University Library of Munich, Germany.
    20. 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.
    21. Deborah Cobb-Clark & Steven Stillman, 2013. "Return migration and the age profile of retirement among immigrants," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-20, December.

    More about this item

    Keywords

    International Migration; Immigrant Workers;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:13322. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.