This paper develops a model which rationalizes the decision of a migrant to return to his home country, despite a persistent higher wage in the host country, and provides a careful analysis of the optimal duration in the host country. Three motives for a temporary migration are provided: Differences in relative prices in host- and home country, the possibility of accumulating human capital abroad which is only earnings-effective back home, and complementaries between consumption and the location where consumption takes place. The optimal duration in the host country is then investigated, and the analysis produces some surprising and unexpected results.
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Paper provided by University College London, Department of Economics in its series Discussion Papers with number
96-02 ISSN 1350-6722.
Find related papers by JEL classification: D9 - Microeconomics - - Intertemporal Choice and Growth F22 - International Economics - - International Factor Movements and International Business - - - International Migration
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