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Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions

Murat Kırdar ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: International Migration; Immigrant Workers (search for similar items in EconPapers)
JEL-codes: F22 J61 (search for similar items in EconPapers)
Date: 2009-02
New Economics Papers: this item is included in nep-lab and nep-mig
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https://mpra.ub.uni-muenchen.de/13322/1/MPRA_paper_13322.pdf original version (application/pdf)

Related works:
Working Paper: Source Country Characteristics and Immigrants' Migration Duration and Saving Decisions (2010) Downloads
Working Paper: Source Country Characteristics and Immigrants’ Migration Duration and Saving Decisions (2010) Downloads
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