Temporary Emigration and Welfare: The Case of Low‐skilled Labor

Abstract

This article studies the implications of temporary emigration for the welfare of a source country. The framework is one of general equilibrium, where the economy's stocks of both capital and labor are endogenously determined by the saving and migration decisions of optimizing agents. Simulations of the model suggest that for realistic values of the parameters, welfare of nonmigrants of the source country is maximized when the migrants are employed abroad for a period in the range of roughly 8-12 years. The ideal duration is found to be an increasing function of the international wage differential, migration costs, and the degree to which the rights of migrants are protected in the host country.

Is Hard Brexit Detrimental to EU Integration? Theory and Evidence

“…A vast literature has also contributed to our understanding of the various dimensions of international labour migration. For example, recent topics include interest groups and immigration (Facchini et al 2011), policy interactions between host and source countries facing skilled-worker migration (Djajić et al 2012) and temporary low-skilled migration and welfare (Djajić 2014). Closer to our work Borjas (2001) tests the hypothesis of immigration being "the grease on the wheels" of the labour market.…”

Time, Space, and Skills in Designing Migration Policy

“…Due to the availability of micro-level data, some authors have managed to quantify the properties of the actual distribution of the length of stay and the factors that cause people to temporarily migrate [Dustmann (2003), Aydemir and Robinson (2008), Bijwaard (2010), Pinger (2010), Bijwaard and Wahba (2014), Bijwaard et al (2014)]. In terms of theoretical modeling, the works by Djajić (2014a, 2014b) propose two-countries models in continuous time, where the decisions about the duration of stay are endogenized.…”

“…Along with quantitative results, this paper contributes to the theoretical literature on modeling international migration. I propose an alternative approach toward enriching a classic discrete choice model (with many sending and receiving countries) in the vein of McFadden (1973), with the agents’ decisions about the duration of stay, inspired by Djajić (2014a). For a simplified version of this model, I provide closed-form solutions for the probabilities of emigration and the distribution of the duration of stay.…”

Temporary work visas as US-Haiti development cooperation: a preliminary impact evaluation

“…Very little of the actual or planned expenditure described by survey respondents could include imported goods, and essentially, none of it will be invested outside Haiti. This means that these expenditures ripple through the local and national economy, raising GDP by more than one dollar for each dollar spent (Djajić 2014). The economics literature contains no estimate of the size of this multiplier effect in Haiti, but the few available estimates for other developing countries range from 1.9 for poor villages in Mexico (Taylor 2004, p. 164) to 2.8 for Morocco (Glytsos 2005).…”