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Overshooting the Savings Target: Temporary Migration, Investment in Housing and Development

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  • Djajić, Slobodan
  • Vinogradova, Alexandra

Abstract

There are two seemingly competing branches of the literature on saving and duration-of-stay decisions of temporary migrants. One relies on the target-saving explanation and the other on utility maximization over a life cycle. We attempt to reconcile the two approaches within a framework where a migrant has a well-defined savings target (in planning to purchase a new home at origin) but also chooses the time of return and the consumption path to maximize lifetime utility. Our analysis highlights the role of property investment and savings repatriation in the relationship between temporary migration and development.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:wdevel:v:65:y:2015:i:c:p:110-121
    DOI: 10.1016/j.worlddev.2014.01.015
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    References listed on IDEAS

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    Cited by:

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    2. Le Wen & Krishna P. Paudel & Qinying He, 2022. "Temporary Migration and Savings Rates: Evidence from China," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2810-2849, December.
    3. 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.
    4. Clemens, Michael A. & Özden, Çağlar & Rapoport, Hillel, 2015. "Reprint of: Migration and Development Research is Moving Far Beyond Remittances," World Development, Elsevier, vol. 65(C), pages 1-5.
    5. 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).
    6. Burzyński, Michał, 2018. "Time, Space, And Skills In Designing Migration Policy," Journal of Demographic Economics, Cambridge University Press, vol. 84(4), pages 355-417, December.
    7. Bensassi, Sami & Jabbour, Liza, 2017. "Return Migration and Entrepreneurial Success: An Empirical Analysis for Egypt," GLO Discussion Paper Series 98, Global Labor Organization (GLO).
    8. Guowen Chen & Stephen B. DeLoach & T. M. Tonmoy Islam, 2023. "Precautionary savings and rural‐to‐urban migration: Evidence from Chinese hukou status," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1215-1233, October.
    9. Le Wen & Krishna P. Paudel & Youhua Chen & Qinying He, 2021. "Urban segregation and consumption inequality: Does hukou conversion matter in China?," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2298-2322, November.

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