Purchasing-power-parity and the saving behavior of temporary migrants / Alpaslan Akay, (University of Gothenburg and IZA), Alexandra Brausmann (ETH Zurich), Slobodan Djajić (The Graduate Institute), Murat G. Kırdar (Boğaziçi University and IZA) ; IZA Institute of Labor Economics
VerfasserAkay, Alpaslan ; Brausmann, Alexandra ; Djajić, Slobodan ; Kirdar, Murat G.
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, July 2018
Elektronische Ressource
Umfang1 Online-Ressource (72 Seiten) : Diagramme
SerieDiscussion paper ; no. 11679
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Purchasing-power-parity and the saving behavior of temporary migrants [0.99 mb]
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How does 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 nominal exchange rate 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 statistical significance higher.