There and Back Again: A Simple Theory of Planned Return Migration

Arbeitspapier

We present supportive empirical evidence and a new theoretical explanation for the negative selection into planned return migration between similar regions in Germany. In our model costly temporary and permanent migration are used as imperfect signals to indicate workers’ high but otherwise unobservable skills. Production thereby takes place in teams with individual skills as strategic complements. Wages therefore are determined by team performance and not by individual skill, which is why migration inflicts a wage loss on all workers, who expect the quality of their co-workers to decline. In order to internalise this negative migration externality, which leads to sub-optimally high levels of temporary and permanent migration in a laissezfaire equilibrium, we propose a mix of two policy instruments, which reduce initial outmigration while at the same time inducing later return migration.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7388

Classification and Topics

• Classification: Wirtschaft ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics ; Geographic Labor Mobility; Immigrant Workers ; Asymmetric and Private Information; Mechanism Design
• Subject: return migration ; signalling ; selection ; strategic complementarity ; matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Knauth, Florian ; Wrona, Jens
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/191413
• Last update: 10.03.2025, 11:41 AM CET