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Abstract

While the economic performance of migrants in the receiving country undoubtedly depends on qualifications, it is also affected by inclinations. Given the probability of return migration, we establish a behavioral link between the incentive of migrants to save in their country of destination and the prevailing wage rate in their home country. We show that migrants coming from a low-wage country optimally save more than migrants from a high-wage country. We allude to policy and research implications suggested by this savings behavior.

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