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An Estimable Dynamic Model of Asset Accumulation and Return Migration

Author

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  • Murat G. Kirdar

    (Department of Economics, METU)

Abstract

This paper analyzes return migration and asset accumulation in a stochastic dynamic model using a longitudinal dataset on legal immigrants in Germany. Our model gives a number of implications about the level, timing and selection of return migration along with the savings proÞles of immigrants. In addition, we examine how the return and savings behavior of immigrants vary according to their country of origin and demographic characteristics. The model is used to determine the impact of a number of counterfactual policy experiments on the composition of immigrants, such as changes in the unemployment insurance program and the payment of bonuses conditional on their employment status and duration of residence to encourage immigrants to return home. In addition, we 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.

Suggested Citation

  • Murat G. Kirdar, 2004. "An Estimable Dynamic Model of Asset Accumulation and Return Migration," ERC Working Papers 0416, ERC - Economic Research Center, Middle East Technical University, revised Dec 2004.
    • Handle: RePEc:met:wpaper:0416
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    File URL: http://erc.metu.edu.tr/en/system/files/menu/series04/0416.pdf
    File Function: First version, 2004
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    References listed on IDEAS

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    11. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
    12. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
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    Cited by:

    1. Murat G. Kirdar, 2005. "Return Migration and Saving Behavior of Foreign Workers in Germany," ERC Working Papers 0506, ERC - Economic Research Center, Middle East Technical University, revised Nov 2005.

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    More about this item

    Keywords

    International Migration; Unemployment Insurance; Life Cycle Models and Saving; Public Policy;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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