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Investment opportunities in the source country and temporary migration

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  • Slobodan Djajic

Abstract

This paper examines how attractive investment opportunities available to temporary migrants at home affect their saving behaviour and the optimal duration of stay abroad. The model predicts an inverse U-shaped relationship between migration duration and the expected rate of return on repatriated savings. A higher rate provides an incentive to go back earlier and consume less abroad, while it can also trigger emigration aimed at generating the savings required for investment after return. The paper illustrates how the behaviour of temporary migrants reflects the interaction between their preferences and the opportunities available in labour and capital markets of both countries.

Suggested Citation

  • Slobodan Djajic, 2010. "Investment opportunities in the source country and temporary migration," Canadian Journal of Economics, Canadian Economics Association, vol. 43(2), pages 663-682, May.
  • Handle: RePEc:cje:issued:v:43:y:2010:i:2:p:663-682
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    Cited by:

    1. repec:ces:ifodic:v:12:y:2014:i:2:p:19116207 is not listed on IDEAS
    2. Bandyopadhyay, Subhayu & Lahiri, Sajal & Younas, Javed, 2013. "On the substitutability between foreign aid and international credit," Economics Letters, Elsevier, vol. 118(2), pages 255-257.
    3. Slobodan Djajic, 2014. "Guest-Worker Programs," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(2), pages 16-19, 07.
    4. Djajić, Slobodan, 2013. "Barriers to immigration and the dynamics of emigration," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 41-52.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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