The Return Motivations of Legal Permanent Migrants: Evidence from Exchange Rate Shocks and Immigrants in Australia

Abarcar, Paolo (2013): The Return Motivations of Legal Permanent Migrants: Evidence from Exchange Rate Shocks and Immigrants in Australia.

Abstract

Why do legal permanent migrants return to their home countries? How do home country conditions influence this decision? This paper uses exogenous home country exchange rate shocks arising from the 1997 Asian Financial Crisis to distinguish return motivations of a national sample of Australian immigrants. On average, a 10% favorable exchange rate shock (a depreciation in the home country currency) leads to a reduced likelihood of return of 0.37 percentage points for migrants. The effect is found to be stronger for those who had pre-existing intentions to return, weaker for those undecided, and zero for those who initially stated their desire to stay. These results favor a life-cycle explanation for migrant behavior and reject the theory that migrants are target earners who seek to invest upon return home.

• Item Type: MPRA Paper
• Language: English
• Keywords: return migration, exchange rates, Asian Financial Crisis, migrants, immigrants
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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