Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration

Stark, Oded and Helmenstein, Christian and Yegorov, Yuri (June 1997) Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration. IHS Economics Series 44

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Abstract or Table of Contents

Abstract: If some of the returns to migration accrue from return migration, the optimal duration of migration may be shorter than the feasible duration of migration. We develop a model that provides and highlights conditions under which return migration takes place even though a reversal of the inter-country wage differential does not occur. In particular, we consider the higher purchasing power of savings (generated from work abroad) at home than abroad as a motive for return migration. Inter alia, our model produces a negative relationship between the optimal duration of migration and the purchasing power differential and in some (but not all) cases, a negative relationship between the optimal duration of migration and the wage abroad. In addition, and contrary to our prior anticipation, our utility maximization analysis suggests that East-West migration will tend to be temporary while inter-European Community (or intra-West European) migration will likely be permanent.;

Item Type: IHS Series
Keywords: 'Return Migration' 'Migrants' Savings' 'Purchasing Power Differentials'
Classification Codes (e.g. JEL): F22, J61
Status: Published
Date Deposited: 26 Sep 2014 10:36
Last Modified: 06 Apr 2016 16:37
URI: http://irihs.ihs.ac.at/id/eprint/984

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