Investment Opportunities in the Source Country and Temporary Migration

Slobodan Djajic ()
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Slobodan Djajic: IUHEID, The Graduate Institute of International and Development Studies, Geneva

No 06-2009, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper examines how attractive investment opportunities available to temporary migrants in their country of origin a¤ect their saving behavior and the optimal duration of stay abroad. The model predicts an inverse U-shaped relationship between migration duration and the expected rate of return on repatriated savings. A higher rate provides an incentive to go back earlier and consume less abroad, while it can also trigger emigration aimed at generating the savings required for investment after return. At a more general level, the paper illustrates how the behavior of temporary migrants re?ects the interaction between their preferences and the opportunities available in the labor and capital markets of both countries.

Keywords: International migration; Remittances; Return migration (search for similar items in EconPapers)
JEL-codes: F22 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2008-03, Revised 2009-05
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp06-2009

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