An Economic Analysis of Return Migration
This paper develops a model which rationalizes the decision of a migrant to return to his home country, despite a persistent higher wage in the host country, and provides a careful analysis of the optimal duration in the host country. Three motives for a temporary migration are provided: Differences in relative prices in host- and home country, the possibility of accumulating human capital abroad which is only earnings-effective back home, and complementaries between consumption and the location where consumption takes place. The optimal duration in the host country is then investigated, and the analysis produces some surprising and unexpected results.
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- Raffelhuschen, Bernd, 1992. "Labor migration in Europe : Experiences from Germany after unification," European Economic Review, Elsevier, vol. 36(7), pages 1453-1471, October.
- Sherwin Rosen, 1972. "Learning by Experience as Joint Production," The Quarterly Journal of Economics, Oxford University Press, vol. 86(3), pages 366-382.