Labor market outcomes, savings accumulation, and return migration

In this paper, I examine the determinants of return migration from Germany for immigrants from four different source countries, and test the savings accumulation conjecture that is used to rationalize return migration decisions using both cross-country and time variation in purchasing power parity. The empirical results confirm the savings accumulation conjecture. Therefore, return migration can be seen as part of optimal life-cycle location choices in this context. I also examine how labor market outcomes influence return decisions. A key finding here is that unlike previous studies, which find a positive impact of unemployment on return migration, I find that the direction of the impact of unemployment changes by the spell length.