Return Migration: Theory and Empirical Evidence from the UK
| DOI | http://doi.org/10.1111/j.1467-8543.2007.00613.x |
| Author | Christian Dustmann,Yoram Weiss |
| Date | 01 June 2007 |
| Published date | 01 June 2007 |
Return Migration: Theory and
Empirical Evidence from the UK
Christian Dustmann and Yoram Weiss
Abstract
In this article, we discuss forms of migration that are non-permanent. We focus
on temporary migrations where the decision to return is taken by the immigrant.
These migrations are likely to be frequent, and we provide some evidence for the
UK. We then develop a simple model that rationalizes the decision of a migrant
to return to his/her home country, despite a persistently higher wage in the host
country. We consider three motives for a temporary migration: (i) differences
in relative prices between host and home country, (ii) complementarities
between consumption and the location where consumption takes place, and (iii)
the possibility of accumulating human capital abroad, which enhances the immi-
grant’s earnings potential back home. For the last return motive, we discuss
extensions that allow for immigrant heterogeneity, and develop implications for
selective in- and out-migration.
1. Introduction
Much of the theoretical and empirical literature on the economics of migra-
tion views migrations as permanent. This is a convenient assumption and
facilitates analysis in many areas, such as immigrant behaviour, and the
impact of migration on residents’ outcomes. We argue in this article that
many (and perhaps the majority) of migrations are temporary rather than
permanent. This may result in misleading conclusions in analysis that
assumes migrations as permanent. One reason is selective out-migration,
which may lead to misleading conclusions about economic performance of
entry cohorts. Borjas (1985, 1987) shows that immigrants may be non-
randomly drawn from the skill distribution in their home countries and that
this has important implications for studying immigrants’ earnings assi-
milation. Similarly, out-migration may again be selective (see Borjas and
Bratsberg 1996). This in turn may have important consequences for the
estimation of performance profiles of immigrants.1
Christian Dustmann is at University College London and the Centre for Research and Analysis
of Migration (CREAM). Yoram Weiss is at Tel Aviv University.
British Journal of Industrial Relations
45:2 June 2007 0007–1080 pp. 236–256
© Blackwell Publishing Ltd/London School of Economics 2007. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
A further reason is that assuming permanency neglects an important
source of variation explaining heterogeneity in behaviour across immigrants.
For instance, when studying human capital investment of individuals and its
derivatives (like earnings functions), the literature usually neglects macro
conditions, as these are the same for all agents in a particular country.
However, when considering immigrants, and if migrations are temporary,
this assumption is not valid: current decisions of immigrants who plan to
return to their home countries (e.g. on human capital investments) will be
based not only on immediate and future circumstances in the host economy,
but also on expected future returns in the country of origin. Both these
reasons add considerable complexity to modelling the behaviour of immi-
grants and introduce differences in behaviour between immigrants and
natives who are otherwise identical, as well as between (otherwise identical)
immigrants of different origin and with different migration durations.
We believe that distinction between permanent and temporary migration is
key for understanding many aspects of immigrant behaviour. We commence
by providing some discussion and definition of some of the forms of migra-
tion that are frequent. We then provide evidence for the temporary nature of
migrations, and we choose the UK as an example. Using data from the
British Labour Force Survey (LFS), we illustrate that many migrants return
back home, and this happens mainly during the first half decade of being in
the host country. We also show that return propensities differ across different
immigrant communities and between immigrants of different ethnicities.
Then, in the simplest possible model, we model a number of reasons why
immigrants may want to return back home. We then illustrate how this
simple model can be extended, by introducing heterogeneity across immi-
grants, and how such a framework helps understanding of selective in- and
out-migration. We conclude with a discussion as to how consideration of
return migrations can explain various aspects of immigrant behaviour.
2. Forms of migration
Migrations may take many different forms. A rough classification of forms of
migrations is provided in Figure 1. In the figure, we have drawn a first
distinction between economic motives for migration and motives related to
natural disaster or persecution. Throughout human history, these are the two
main reasons why individuals migrate. Receiving countries today draw a
distinction between migrations that are due to these two different motiva-
tions, and have different arrangements in place for refugees (or asylum
seekers) and economic migrants.
Migrations that are due to economic motives may again take different
forms, and in the figure, we distinguish on the next level between temporary
migrations and permanent migrations. We draw this categorization from the
perspective of the receiving country: a migrant is a temporary migrant if
he/she stays in a particular country for a limited period of time.2At the same
Return Migration 237
© Blackwell Publishing Ltd/London School of Economics 2007.
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