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Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions

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  • Kirdar, Murat

Abstract

This paper examines how immigrants' migration duration and saving decisions in the host country respond to changes in purchasing power parity (ppp) as well as in the wage ratio between the host and source countries. For this purpose, I develop a model of immigrants' joint migration duration and saving decisions and derive comparative static results regarding the impact of ppp and wage ratio on these decisions. An interesting implication of the theoretical model is that immigrants may in fact stay longer in the host country as a result of an increase in ppp, in particular those with a low degree of relative risk aversion. I test the implications of this model using a longitudinal data set that includes immigrants from four different source countries in Germany and employing panel data estimation methods. The empirical results reveal that an increase in ppp decreases the optimal migration duration. Moreover, optimal migration duration is elastic with respect to ppp. An interesting empirical finding is that, holding individual immigrant characteristics constant, immigrants from poorer source countries have a shorter migration duration than immigrants from wealthier source countries. The empirical results also reveal that ppp has a positive effect on saving rate, which is consistent with the implications of the model, and that saving rate is also elastic with respect to ppp.

Suggested Citation

  • Kirdar, Murat, 2009. "Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions," MPRA Paper 13322, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13322
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    References listed on IDEAS

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    Cited by:

    1. Sylvie Démurger & Hui Xu, 2011. "Left-Behind Children and Return Decisions of Rural Migrants in China," Post-Print halshs-00625636, HAL.
    2. Slobodan Djajić, 2009. "On the welfare implications of temporary and permanent immigration," Bank i Kredyt, Narodowy Bank Polski, vol. 40(5), pages 49-60.
    3. 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.
    4. 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.
    5. Alexandra Vinogradova, 2016. "Illegal immigration, deportation policy, and the optimal timing of return," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 781-816, July.
    6. Hera Susanti & Arie Damayanti, 2015. "Determinants of Internal Migration in Indonesia," Working Papers in Economics and Business 201505, Faculty of Economics and Business, University of Indonesia, revised Oct 2015.
    7. Slobodan Djajić, 2013. "Some Essentials Of A Workable Guest‐Worker Program," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 739-766, May.

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    More about this item

    Keywords

    International Migration; Immigrant Workers;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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