Labor Market Outcomes, Savings Accumulation, and Return Migration

Abstract

In this paper, I test the savings accumulation conjecture that is used to rationalize return migration decisions in the context of immigrants in Germany. Using cross-country and time variation in purchasing power parity, I distinguish between the two competing capital accumulation conjectures (human capital vs. savings accumulation) and uncover evidence for the savings accumulation conjecture. In addition, I examine how labor market outcomes influence return decisions. A key finding here is that unlike previous studies which find a positive impact of unemployment on return migration, I find that the direction of the impact of unemployment changes by the spell length.International Migration; Capital Accumulation; Unemployment; Duration Analysis