Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295607 
Year of Publication: 
2019
Series/Report no.: 
CReAM Discussion Paper Series No. 16/19
Publisher: 
Centre for Research & Analysis of Migration (CReAM), Department of Economics, University College London, London
Abstract: 
How does the saving behavior of immigrants respond to changes in purchasing power parity between the source and host countries? We examine this question by building a theoretical model of joint return-migration and saving decisions of temporary migrants and then test its implications by using data from the German Socioeconomic Panel on immigrants from 92 source countries. As implied by our theoretical model, we find that the saving rate increases in the price of host- in terms of source-country currency, but decreases in the source-country price level and that the absolute magnitude of both relationships increases as the time to retirement becomes shorter. At the median level of years to retirement, the absolute values of the elasticity of savings with respect to the nominal exchange rate and with respect to the source-country price level are both close to unity. Moreover, as we gradually restrict the sample to individuals with stronger return intentions, the estimated magnitudes become larger and their stastical significance higher.
Subjects: 
Migrants' Savings
Return Migration
Exchange Rates
Prices
PPP
JEL: 
F22
J61
Document Type: 
Working Paper

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