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How do migrants save? Evidence from the British Household Panel Survey on temporary and permanent migrants versus natives

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  • Giuseppe Arcangelis
  • Majlinda Joxhe

Abstract

This paper investigates the saving behavior of migrants in the UK across different dimensions, i.e., comparing temporary versus permanent migrants and migrants versus natives. Established theoretical predictions show that migrants save more when they plan to stay in the destination only temporarily as target savers. Our empirical evidence takes into account the contemporaneous choice of savings and remittances. Moreover, when comparing the saving profiles of both natives and migrants, we uncover the weight of observable socio‐economic characteristics other than income and wealth. We use the British Household Panel Survey for the period 1991‐2008. The estimation results confirm that temporary migrants have a propensity to save 26 per cent higher than permanent migrants in UK. We also introduce an index of financial capability adjusted for income as an explanatory variable and, when employing the Blinder‐Oaxaca decomposition for the Tobit model of saving choice, migrants are more affected by observable social‐economic characteristics than natives. JEL classification: F22; D91; C40 Copyright Arcangelis and Joxhe; licensee Springer. 2015

Suggested Citation

  • Giuseppe Arcangelis & Majlinda Joxhe, 2015. "How do migrants save? Evidence from the British Household Panel Survey on temporary and permanent migrants versus natives," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-23, December.
  • Handle: RePEc:spr:izamig:v:4:y:2015:i:1:p:1-23:10.1186/s40176-015-0034-y
    DOI: 10.1186/s40176-015-0034-y
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    Cited by:

    1. Bastien Chabé-Ferret & Joel Machado, 2017. "The Impact of Intention to Leave on Immigrants’ Behaviour," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(03), pages 16-19, October.
    2. Majlinda Joxhe & Pasquale Scaramozzino & Skerdilajda Zanaj, 2020. "Fiscal effects of migrants in Europe: a quantile regression Approach," DEM Discussion Paper Series 20-08, Department of Economics at the University of Luxembourg.
    3. Chabé-Ferret, Bastien & Machado, Joël & Wahba, Jackline, 2018. "Remigration intentions and migrants' behavior," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 56-72.
    4. Irene Ferrari, 2020. "The nativity wealth gap in Europe: a matching approach," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 33-77, January.
    5. Bastien Chabé-Ferret & Joël Machado & Jackline Wahba, 2016. "Return Plans and Migrants' Behavior," LIDAM Discussion Papers IRES 2016016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. 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).
    7. repec:ces:ifodic:v:15:y:2017:i:3:p:50000000000046 is not listed on IDEAS
    8. Shirin Akter, 2018. "Do remittances and foreign aid augment the gross savings: Bangladesh, India and Philippines perspective?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 65(4), pages 449-463, December.

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    More about this item

    Keywords

    Temporary migration; Savings; Remittances; Blinder‐Oaxaca decomposition;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General

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