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The return motivations of legal permanent migrants: Evidence from exchange rate shocks and immigrants in Australia

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  • Abarcar, Paolo

Abstract

Why do legal permanent migrants return to their home countries? How do home country conditions influence such a decision? This paper uses exogenous exchange rate shocks arising from the 1997 Asian Financial Crisis to distinguish between the motivations of Australian immigrants to return to their home country. A 10 percent favorable shock (a depreciation in a migrant’s home country currency) leads to an almost 10 percent reduced likelihood of return in a two year period. The effect is stronger for those with pre-existing intentions to return, weaker for those undecided, and zero for those who initially desired to stay. These results favor a life-cycle explanation for migrant behavior and reject the theory that migrants are target earners who seek to invest upon return home.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jeborg:v:144:y:2017:i:c:p:62-77
    DOI: 10.1016/j.jebo.2017.09.025
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    Cited by:

    1. Parag Mahajan & Dean Yang, 2020. "Taken by Storm: Hurricanes, Migrant Networks, and US Immigration," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 250-277, April.
    2. Nguyen, Ha & Duncan, Alan, 2015. "Macroeconomic fluctuations in home countries and immigrants’ well-being: New evidence from Down Under," MPRA Paper 69593, University Library of Munich, Germany, revised Feb 2016.
    3. Caballero, María Esther & Cadena, Brian C. & Kovak, Brian K., 2023. "The international transmission of local economic shocks through migrant networks," Journal of International Economics, Elsevier, vol. 145(C).
    4. Tiwari, Smriti, 2021. "Do macroeconomic fluctuations at destination matter in determining migrants’ return decisions?," World Development, Elsevier, vol. 148(C).
    5. Akay, Alpaslan & Brausmann, Alexandra & Djajic, Slobodan & Kirdar, Murat Güray, 2018. "Purchasing-Power-Parity and the Saving Behavior of Temporary Migrants," IZA Discussion Papers 11679, IZA Network @ LISER.
    6. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    7. Alexander Persaud, 2023. "A (paid) passage to India: Migration and revealed willingness to pay for upper‐caste status," Economic Inquiry, Western Economic Association International, vol. 61(3), pages 652-674, July.
    8. Hasan, Syed & Shakur, Shamim & Breunig, Robert, 2021. "Exchange rates and expenditure of households with foreign-born members: Evidence from Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 977-997.
    9. Wahba, Jackline, 2026. "Return migration and economic development: opportunities and challenges," World Development, Elsevier, vol. 198(C).
    10. Nguyen, Ha Trong & Duncan, Alan S, 2017. "Exchange rate fluctuations and immigrants' labour market outcomes: New evidence from Australian household panel data," Journal of International Economics, Elsevier, vol. 105(C), pages 174-186.
    11. 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).
    12. Hoang, Thu, 2025. "The effect of home countrys income on immigrant-origin childrens education: Evidence from Australia," Warwick-Monash Economics Student Papers 84, Warwick Monash Economics Student Papers.
    13. Govert E. Bijwaard & Jackline Wahba, 2023. "Return Versus onward Migration: Go Back or Move On?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 640-667, September.
    14. repec:wbk:wbrwps:10250 is not listed on IDEAS

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    Keywords

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    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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