Abstract
Abstract Migration is often viewed as an investment decision. Temporary migrants can be expected to invest less in accumulating human capital specific to the host country. Instead, they work more hours in order to accumulate savings and invest in financial capital that can be transferred back to their country of origin upon return. In this paper, using German panel data, we explore how temporary migrants differ from permanent migrants in their labor supply decisions and behavior. After correcting for endogeneity bias, male temporary migrants are found to work more hours than permanent ones. The effect for females is statistically insignificant. Jel codes J22, J61, F22
Highlights
The decision to migrate, whether internal or international, is often viewed as an investment
One of the issues concerning temporary migration is that temporary migrants may invest less than permanent ones in human capital that is specific to the host economy
A free rider problem may be more severe for temporary migrants than for other workers in that firms may be hesitant to invest in job training for temporary migrants because they will lose the benefits of this investment when the migrant returns to the home country
Summary
The decision to migrate, whether internal or international, is often viewed as an investment. This assimilation has been studied by Chiswick (1978) who found that in the US, wage rates of migrants and natives converged with time due to early investment in human capital specific to the destination labor market. We would expect a similar manifestation of behavioral differences between temporary and permanent migrants when we look at the supply of working hours.
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