Return Migration and Saving Behavior of Foreign Workers in Germany

Murat Kırdar

No 506, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: In this paper, I develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on legal immigrants in Germany. The model gives a number of implications about the level, timing and selection of return migration as well as asset accumulation of immigrants according to their country of origin We also calculate the net lifetime contributions of immigrants to the pension and unemployment insurance systems of the host country. The estimated model is used to determine the impact of a number of counterfactual policy experiments on the return and savings behavior of immigrants as well as on their net contribution to the social security system. These counterfactuals include changes in the unemployment insurance program, payment of bonuses to selected groups to encourage return home, and exchange rate premiums by the source countries. In addition, I assess the impact of counterfactuals in the macroeconomic environment, like changes in wages in Germany and in purchasing power parity between Germany and the source countries.

Keywords: International Migration; Unemployment Insurance; Life Cycle Models and Saving; Public Policy (search for similar items in EconPapers)
JEL-codes: D91 J61 J64 J65 J68 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2005-11, Revised 2005-11
New Economics Papers: this item is included in nep-dge and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:0506

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