TY - JOUR
T1 - Migrants' Savings, Purchasing Power Parity, and the Optimal Duration of Migration
AU - Stark, Oded
AU - Helmenstein, Christian
AU - Yegorov, Yury
N1 - Funding Information:
⁄We are grateful to several referees and to many colleagues, especially in Vienna, for comments and suggestions. We thank the Austrian Science Foundation (Contract No. P10967-S0Z) for partial financial support.
PY - 1997
Y1 - 1997
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=0001101103&partnerID=8YFLogxK
U2 - 10.1023/A:1008616421523
DO - 10.1023/A:1008616421523
M3 - מאמר
AN - SCOPUS:0001101103
VL - 4
SP - 307
EP - 324
JO - International Tax and Public Finance
JF - International Tax and Public Finance
SN - 0927-5940
IS - 3
ER -