Академический Документы
Профессиональный Документы
Культура Документы
doi:10.1111/j.1468-2435.2009.00562.x
ABSTRACT
This paper examines the determinants and consequences of temporary and
permanent migration from the perspective of migrant source countries.
Based on a large and detailed household dataset on migration in the
Republic of Moldova, the most important factors that inuence a respective migrants decision whether to return to the home country or to stay
abroad for good are presented rst. Second, the remittance behaviour of
temporary and permanent migrants is analysed to investigate how developing countries benet from either type of migration. The results indicate
that the most important determinants of permanent migration relate to the
economic conditions at home and abroad, as well as to the legal status of
a migrant in the host country. Furthermore, economic and political frustration plays an important role in the decision of permanent migrants not
to come back. On the contrary, family ties as measured by the number of
close family members at home act as a pull factor for migrant return.
Interestingly, permanent migrants use source country networks that differ
from those of temporary migrants, indicating that the return decision of
individuals is inuenced by the decision of their migrant peers. Concerning
remittances, the results reveal that, in absolute terms, temporary migrants
remit around 30 per cent more than their permanent counterparts. This
outcome is surprising, because temporary migrants often reside in countries where wages are much lower. Overall, the ndings indicate that when
compared to permanent migration, temporary migration is favourable for
developing countries, as it fosters not only repatriation of skills, but also
higher remittances, and home savings.
143
INTRODUCTION
In recent years, the idea of migration and remittances as means to
enhance development and poverty reduction has gained in weight
against the fears of brain drain and exploitation. For many countries,
remittances have become a more important source of external nancing
than development aid or foreign direct investment. Moreover, migration
can lead to knowledge and technology spillovers by migrants who utilize
skills acquired abroad (IDC, 2004).
At the same time, a gradual shift in the public debate of most Western
European countries has taken place. Many countries now recognize the
economic benets of inward migration for their aging economies and
start to accept their roles as immigration countries (see e.g. Sussmuth,
2001 or Glover, 2001). To set up good migration policies, it is important
to identify when migration is most benecial. This paper argues, in line
with several other studies (Amin and Mattoo, 2005; Dustmann and
Kirchkamp, 2002), that migration is most benecial if it is temporary, in
other words, if migrants leave their country with the intention to return
some day for good. This is true not only for developed countries,
attempting to import additional short-term labour, but also for developing countries. The latter can expect higher remittances, repatriated skills,
and technology spillovers as a result of temporary migration. The idea is
that migrants move abroad to sell their labour but at the same time
maintain close ties to their home country.
In the face of this discussion, little research exists that deals with the
characteristics of permanent and temporary migration. While some
attention has been devoted to the migration duration and its implications for savings and remittances, there are few studies that focus explicitly on the determinants for the return decision and the respective
remittance behaviour of permanent and temporary migrants. Yet, for
the design of successful migration policies, it is of core importance to
explicitly identify migrant and household parameters that inuence the
decision to come back. Also, the social and economic parameters that
abet return are of interest. Besides, knowledge about how return affects
remittance patterns is of crucial for the design of migration policies targeting brain gain and remittances. Hence, this paper aims to analyse
the determinants of the return decision and respective remittance patterns. To this end, a new detailed micro dataset for the Republic of
Moldova is used, a country where both permanent and temporary
migration is highly prevalent. The data focuses on migrant characteristics
2009 The Author
International Migration 2009 IOM
144
Pinger
145
146
Pinger
147
148
Pinger
circumstances. First, individual characteristics that express the net earnings possibilities abroad should have a positive inuence on staying permanently (Stark et al., 1997b). This absolute earnings differential is
usually larger for those individuals that are better educated and have
more work experience abroad, as well as for those that are employed
legally. Second, as far as the family composition is concerned, being
married and having small children should reduce the likelihood of staying permanently (Dustmann, 1992). This is true, because emotional costs
are larger if the family is permanently torn apart, as are the economic
costs if the entire family moves abroad. Furthermore, permanent migration is less likely the larger the family, because migration then means
the loss of many loved ones if the family stays behind and high costs if
the family is to be taken along. Likewise, a migrant from a household
located in an urban location is more likely to leave permanently,
because community ties in cities are not as strong as in rural areas.
Third, a higher age should reduce the probability to stay abroad,
because adaptation and assimilation costs increase with age. Fourth,
individuals that have a dislike for the conditions at home will be more
induced to leave forever (Dustmann, 2000). This dislike may be determined by the perceived living standard and by the labour market conditions at home. Moreover, the legal status abroad should play a role, i.e.
whether someone holds a work and or residence permit. Costs are
higher if a migrant stays abroad illegally, has no residence permit or an
illegal job. Not abiding the law may lead to imprisonment and nes and
it also entails costs related to emotional stress and anxiety (Lucke et al.,
2007).
Lastly, network effects may play an important role on migration decisions as emphasized by Palloni et al. (2001) and in Gorlich and Trebesch
(2008). Thus, for example, knowing other migrants or receiving help at
destination facilitates permanent settlement. The same is true for the
presence of family abroad. Besides, individuals who know many other
migrants that have migrated with a particular return intention are not
only likely to herd and imitate their behaviour, but will also have
access to different types of destinations and work opportunities.
The inuence of the return intention on remittances
Related to the characteristics of temporary and permanent migrants,
and of central importance for policy implications, is the respective remittance behaviour. Information on remittance patterns of Moldovan
migrants is contained in the reports by Ghencea and Gudumac (2004);
2009 The Author
International Migration 2009 IOM
149
Cuc et al. (2005); Ruggiero (2005) and Gorlich et al. (2005). These
authors nd that the amount of remittances is generally positively correlated with the age of the migrant and negatively with the year of rst
departure, indicating that the amount remitted decreases with the length
of stay (Cuc et al., 2005; Ruggiero, 2005). Furthermore, being married
has a positive impact on the amount remitted, as does the amount of
earnings. The latter is supported by the fact that migrants in high-wage
EU countries usually remit more than migrants in CIS states. Also,
funds remitted usually increase with years of schooling, indicating that
an initial education investment by the family is repaid in the form of
remittances (Lucas and Stark, 1985; Rapoport and Docquier, 2005).
Lastly, a second migrant in the family signicantly reduces remittances,
because then several migrants are sharing the burden of supporting the
family (Gorlich et al., 2005; Rodriguez, 1996).
With respect to return intentions, the previous literature suggests that
migrants remit more, if they plan to return to the home country (Galor
and Stark, 1990; Merkle and Zimmermann, 1992). This is intuitive,
because returnees at least partly benet from their remittances after
return, such that remittances can be considered a special form of savings. Also, remittances of temporary migrants are often higher, because
the nuclear family stays in the home country (Poirine, 1997). Hence,
temporary migrants try to transfer as much consumption as possible to
the time after their return, while permanent migrants are more induced
to save and spend their money in the foreign country (Merkle and
Zimmermann, 1992). In fact, permanent migrants usually pay part of
their income on integration costs, that is, to learn the language, to
buy a house and for socializing purposes (Glytsos, 1997). Moreover,
remittances of permanent migrants are merely altruistic and thus lower
(Bauer and Sinning, 2005). In general, it can be assumed that migrants
who plan to return are signicantly more likely to remit and that the
amount of remittances sent is higher.
150
Pinger
contains a brief description of the data and the sample including a range
of descriptive statistics that serve as a prima facie comparison of temporary and permanent migrants.
Sample description
The data of the cross-sectional household survey used has been collected
between June and August 2006 with the aim to obtain more information
about migration and remittance patterns in the Republic of Moldova.3
For the purpose of studying temporary and permanent migration, the
data are unique in that these contain not only information on migrants
that are still considered part of the household, but also information on
those migrants that are former household members, meaning that they
have left a long time ago (often permanently) to settle abroad. Thus,
detailed information can be explored about a larger number of permanent migrants than is usually the case for source country datasets. Overall, the data at hand yield information of about 3,940 randomly selected
households from all over the country of which 1,495 reported the migration behaviour of at least one current or ex-household member working
abroad in either 2005 or during the rst half of 2006. Since some of
these households have several migrants, the dataset comprises migration
details of a total of 2,081 migrants.
The survey contains screening questions directed at the household and
demographic characteristics such as age, education, occupation, and
family status of all household members. The same demographic particulars were also collected for the households migrants, being family members, ex-family members or friends. Besides, additional detailed
information about migrant family or ex-family members is available
concerning their motivation to migrate, the country of departure, the
number of leaves and the type of occupation abroad. Also, information
about departure ways and the use of networks by these migrants is
included. Other household questions comprise expenditures and cash or
in-kind transfers sent or received; the use of these remittances, as well as
the households perceived living standard in Moldova.
The sample used for this analysis contains personal characteristics of
those 1,618 migrants and their households (1,218) for which information
about the return plans of the migrant and the other most important
variables is available.4 Information about whether someone migrates legally, works legally, has a residence permit abroad is sensitive and difcult to obtain. Hence, for these three questions, if the respondent
2009 The Author
International Migration 2009 IOM
151
refused to answer or left a blank, it was assumed that the answer should
have been illegal. Furthermore, around 100 respondents refused to
answer the question of whether the respective migrant received help at
the destination and by whom. In those cases it was assumed that some
form of help was available, possibly by illegal facilitators. Last, the
response rate for the year of rst departure and for the number of years
a family receives remittances was low when compared to other questions. In these cases the answer was imputed.
Descriptive statistics
The descriptive statistics in Table 1 give a summary overview of the data
as well as a rst indication in how far the group of permanent migrants
differs from the one of temporary migrants. The variables included are
listed and grouped according to remittance indicators, personal characteristics, migration information, network information and household
variables. In the three columns of the table, the overall mean, the mean
for permanent migrants, and the mean for temporary migrants of each
variable are reported. In the last column the difference in mean is
assessed by a t-test in the case of normal variables and by a Pearsons
chi-square test if variables are categorical.
Description of variables
Table 1 shows that the largest fraction in our sample consists of temporary migrants, indicating that this is the form of migration that occurs
most often in Moldova (IOM (International Organization for Migration), 2005; Cuc et al., 2005).5 The variables concerning a migrants personal characteristics comprise the migrants age, gender, education and
family status. This category includes whether a person holds the Moldovan nationality and whether she is a student. Migration information is a
set of variables that mainly contains information about the costs and
benets of staying and returning. The latter include not only information about the legal status of the stay abroad, but also about the
motives for migration that can give further hints with respect to costs
and benets. Likewise, these variables include a dummy for the destination as a proxy for living conditions abroad, earnings possibilities, and
the cost of migration.
Concerning migration networks, the list of variables includes indicators
as to whether a migrant received help at the destination or whether his
family is present abroad. The presence of other migrants ensures that
2009 The Author
International Migration 2009 IOM
479
29.60
39.25
639.34
46.78
24.03
10.73
3.43
35.2
48.85
71.61
4.8
28.18
67.01
68.68
14.41
82.25
84.34
10.65
31.32
26.1
24.43
1618
100
44.81
1155.08
24.62
27.45
21.24
19.06
35.31
57.85
72
5.32
34.92
59.77
73.49
8.96
76.33
71.69
14.46
34.30
41.84
8.9
N
% of sample
Remittances
Remitter (yes=1)
Amount remitted (all)t
Remit (below 25% of wage)tt
Remit (25-50% of wage)tt
Remit (50-75% of wage)tt
Remit (75-100% of wage)tt
Migrant characteristics
Age
Gender (male=1)
Married (yes=1)
At most primary education (yes=1)
At most secondary education (yes=1)
At most tertiary education (yes=1)
Nationality (Moldovan=1)
Student (yes=1)
Migration information
Legal migrant, last time (yes=1)
Residence permit (yes=1)
Migrate to invest, bus + household-inv. (yes=1)
Migrate because unemployed (yes=1)
Migrate to inc. daily cons. (yes=1)
Migrate because life abroad is better (yes=1)
permanent
overall
Variable
Means
35.35
61.63
72.17
5.53
37.75
56.72
75.5
6.67
47.15
1335.64
17.08
28.61
24.82
24.38
1139
70.40
temporary
TABLE 1
0.89
22.59***
0.05
0.36
13.59***
14.87***
8.05***
24.71***
13.22***
53.65***
8.01***
2.69
69.33***
202.31***
chi2
chi2
chi2
chi2
chi2
chi2
8.51***
-5.97***
82.64***
1.83
20.63***
49.44***
t
chi2
chi2
chi2
chi2
chi2
chi2
chi2
chi2
t
chi2
chi2
chi2
chi2
comparison of
means frequency
Person v2 or t-test
152
Pinger
47.39
35.49
1998.48
84.34
36.95
26.51
15.03
13.78
72.03
58.66
38.83
6.3
11.88
3.11
8.38
83.48
69.52
54.93
45.72
21.09
50.31
59.77
29.79
2000.45
74.91
52.9
21.76
8.47
10.69
75.59
61.06
37.45
5.62
13.51
3.83
13.76
57.96
78.92
50.32
30.22
25.15
49.51
permanent
overall
Means
Variable
(CONTINUED)
TABLE 1
4.13
16.02
47.23
82.88
48.38
23.71
26.87
49.17
77.09
62.07
36.87
5.32
14.2
64.97
27.39
2001.28
70.94
59.61
19.75
5.71
9.39
temporary
-12.77***
-8.33***
10.77***
37.76***
8.98***
77.50***
5.98**
0.18
4.67**
1.65
0.55
7.98***
-9.07***
chi2
chi2
chi2
t
t
t
t
t
chi2
chi2
chi2
chi2
chi2
43.33***
10.57***
-9.24***
32.23***
69.50***
9.05***
37.83***
6.79***
chi2
chi2
t
chi2
chi2
chi2
chi2
chi2
comparison of
means frequency
Person v2 or t-test
153
24.41
overall
Variable
Means
27.97
permanent
(CONTINUED)
TABLE 1
22.91
temporary
chi2
4.68**
comparison of
means frequency
Person v2 or t-test
154
Pinger
155
part of the migrants own culture is present in the foreign country, possibly inducing migrants to stay longer. Furthermore, the phenomenon of
herding is accounted for by including a variable that comprises the
information of whether a migrant knows other migrants and whether
there is a high prevalence of permanent and temporary migration in the
region of origin in Moldova.
Next to personal, migration and network variables, another important
set of variables included are those characteristics that can be attributed
to the migrants households. The latter comprise the household size, the
percentage of children or highly educated household members, as well
as information about the residence area and perceived living standards.
Similar to other indicators of migrant satisfaction, a high (low) perceived living standard in Moldova should increase the probability to
return (stay).
As far as remittances are concerned, the dependent variable included in
later analysis evaluates the overall amount remitted by the migrant. A
rst nonparametric comparison presented in Table 1 shows that remittances tend indeed to be higher if a migrant plans to stay abroad only
temporarily.
Prima facie comparison of groups
The information about differences in mean and frequency in Table 1
give a rst indication about the characteristics of the two groups of
migrants analysed. In terms of education, the percentage of individuals
with tertiary education is about ten percentage points higher among the
group of permanent migrants than among the group of temporary
migrants. In line with this, more than twice as many permanent
migrants are students as compared to the temporary migrants, suggesting a larger earnings potential for the highly educated. Also, permanent
migrants are signicantly more often employed legally and in uppermiddle high wage sectors, while temporary migrants more often work in
low-wage sectors such as agriculture. This conrms the presumption that
relative wages play a role in the decision to stay.
Furthermore, permanent migrants more often have a non-Moldovan
nationality. This reects the fact that a Romanian passport facilitates
access to European destinations, but also the decision of many Russian
citizens to return to their home country (Munteanu, 2001). Besides,
around 60 per cent of temporary migrants are male while less than half
2009 The Author
International Migration 2009 IOM
156
Pinger
of the permanent migrants are male, reecting the dichotomy of Moldovan migration described earlier.
Other eye-catching differences displayed in Table 1 are those variables
that reect the general satisfaction of a migrant or his family with the
situation in Moldova. A much larger fraction of permanent migrants left
to seek a better life abroad, conrming the presumption that the main
purpose of migration for permanent migrants is the search for a different life abroad, while for temporary migrants it is a survival strategy of
poor families to raise money for home consumption (Glytsos, 1997).
The results displayed in Table 1 also indicate that a larger fraction of
temporary migrants leave with the intention to increase consumption or
due to unemployment. Similarly, a signicantly larger fraction of permanent than temporary migrant households thinks that the present living
standard is bad or very bad. This can be interpreted as a rst indication
that economic frustration acts as a push factor for permanent migration.
As far as household characteristics are concerned, households with
temporary migrants tend to have on average one member more than
permanent migrant households. The latter comprise fewer children,
are more often headed by a female or an older person and are more
often located in urban Moldova. All these differences point towards
the importance of emotional ties for the decision to return. No significant differences in family status can be found between the two
groups.
Last, there seems to be large differences in migrant networks among
temporary and permanent migrants. Permanent migrants do not only
have more often contacts to other migrants abroad, these migrants also
more often originate from districts with many other permanent
migrants. Similarly, temporary migrants are more likely to originate
from neighbourhoods with a large fraction of temporary migrants.
Hence, migrant networks seem to differ across groups, indicating a certain degree of imitation or herding among Moldovas migrants.
Regarding mean differences in remittances sent across groups, again
large differences become apparent. Although permanent migrants are
better educated and more often employed in high wage sectors and high
wage countries, they remit a signicantly smaller fraction of their
income. In fact, 46 per cent of all permanent migrants remit less that a
quarter of their income, while this is only true for less than 20 per cent
2009 The Author
International Migration 2009 IOM
157
of the return migrants. At rst sight one may presume that the lower
fraction of income sent is compensated by a higher overall income. Yet,
a comparison of mean amounts of remittances sent over the last year
shows that temporary migrants remit more than twice the amount of
permanent migrants. Hence, these rst results conrm the hypothesis
that the return intention plays a signicant role for the amount of
money remitted.
EMPIRICAL ANALYSIS
This section comprises the empirical analysis, including a presentation of
the methodology, the major ndings and their interpretation. In the rst
instance the determinants for the decision to stay permanently are investigated, closely followed by an examination of the respective remittance
behaviour of both groups of migrants.
Methodology
The determinants of return and respective remittance patterns are examined econometrically, making use of the cross-sectional dimension of the
data. First, the return decision is modelled as a binary choice model
using maximum likelihood estimation. Second, the impact of return on
remittances is investigated by means of a tobit model.
The decision between staying abroad or returning home is a qualitative
and mutually exclusive choice that can best be estimated using a standard probit model. To this end a new variable is dened as
1 if wstay >0
wstay
1
0 if wstay 0
where w * stay is the unobserved latent variable. wstay takes on the value
0 if the migrant wants to return to Moldova, while it assumes the value
1 if the migrant intends to stay permanently abroad. Hence, this variable
expresses the decision to stay or return taken by each individual
migrant, who seeks to maximize utility. As described earlier, the latter is
related to a range of observable migrant and household characteristics.
The probit model that estimates this relationship by means of loglikelihood estimation has the following functional form: Prob
Probwstay 1jX UX0 b:
2009 The Author
International Migration 2009 IOM
158
Pinger
Here, b denotes a vector of coefcients and F the standard normal distribution. Correspondingly, X is a vector of variables that comprise
household variables, individual migrants characteristics as well as general migration and network information. For convenience of interpretation, marginal effects are estimated, evaluated at the sample means of
the data.7
To evaluate the benets of repatriation, it is examined how the return
decision affects the amount of remittances sent by each migrant.8 The
dependant variable, remittances, is limited to the non-negative range
and contains relatively many zeros, as around 80 migrant families indicated that they received zero remittances. Out of these, only those
migrants are included that are abroad for longer than six months, which
is assumed to be the time it takes to nd a job and to start remitting.
To adequately deal with the problem of zeros, a tobit model is be estimated, where the zero observations are treated as corner solutions and
are censored in the left tail of the distribution
y X0 b cwstay e;
where y = 0 if y* 0 and y = y* if y* > 0. To ensure homoscedasticity the dependent variable amount remitted was transformed by
taking logarithms after adding an arbitrary constant (1) to each observation (ln (y + 1)). In the above equation, wstay is the earlier dened binary variable that describes the return intentions of each particular
migrant. Furthermore, X is a vector of control variables that comprises
personal, migration and household traits. Further controls comprise:
First, nuclear as a dummy that indicates whether a migrants nuclear
family is still living in Moldova. Second, seasonal to signify whether
an individual only migrates seasonally. Third, number of years that a
migrant is already sending remittances and its square are included,
because several studies show that the increase in remittance over time
tends to follow a concave pattern (see e.g. Borjas, 1985).
RESULTS
The results of the analysis uncover the determinants for the return decision as well as the impact of the return intention on the amount of
remittances sent. First, the results of the probit model estimation for the
return choice are presented. Second, the estimates of the tobit model for
the amount of remittances sent are addressed, putting particular emphasis on the effect of migrant return.
2009 The Author
International Migration 2009 IOM
159
Household information:
No of persons in household
% children (<15 years)
% of adults with higher education
Age of household head
Urban
Living standard bad
Living standard good
Year of first departure
Personal characteristics:
Age
Male
Married
Primary education
Tertiary education
Moldovan
Student
Reason for migration:
To invest
To increase daily consumption
Better life abroad
Ease of migration stay:
Legal migration
Residence permit
Legal employment
Wage Information:
Low-wage sector
Variables
(-4.32)
(-1.85)
(-0.5)
(-0.99)
(-2.67)
(-0.26)
(-0.67)
-0.007***
-0.0551*
0.0157
-0.0552
-0.098***
-0.0084
-0.0318
(-4.61)
(-0.31)
(-3.18)
(-3.53)
(-3.52)
(-1.14)
(-1.69)
-0.0244 (-0.65)
-0.0667* (-1.91)
-0.0286 (-0.77)
-0.1009*** (-3.46)
0.4959*** (-7.61)
-0.0953*** (-2.67)
-0.0066*** (-4.41)
-0.0573* (-1.93)
-0.0214 (-0.57)
0.1066*** (-3.21)
0.0726** (-2.02)
-0.095*** (-3.27)
0.4951*** (-7.61)
-0.007*** (-4.66)
-0.0461 (-1.59)
(-2.28)
(-3.51)
(-2.88)
(-1.4)
(-2.58)
(-5.88)
0.0007**
0.0043***
0.0972***
0.0495
-0.0885**
-0.0231***
0.0012***
0.0039***
0.0945***
0.0369
-0.0896***
-0.0231***
(-3.28)
(-3.22)
(-2.82)
(-1.04)
(-2.64)
(-5.78)
-0.0505*** (-4.85)
-0.0455*** (-4.39)
0.1074*** (-3.19)
0.0746** (-2.1)
-0.0249 (-0.63)
-0.1192*** (-4.15)
0.5066*** (-8.47)
-0.004***
-0.0543*
0.0436
-0.0334
-0.0749***
-0.007
0.0238
-0.0494***
-0.0003
0.0012***
0.0047***
0.119***
0.0397
-0.0602*
-0.0022 (-0.06)
0.1079*** (-3.09)
0.0751** (-2.1)
-0.0218 (-0.54)
-0.1039*** (-3.53)
0.4983*** (-7.71)
(-4.13)
(-0.57)
(-3.15)
(-2.9)
(-2.73)
(-1.03)
(-2.53)
(-5.72)
-0.0439***
-0.0005
0.0012***
0.0038***
0.0946***
0.0366
-0.0867**
-0.0229***
TABLE 2
160
Pinger
-0.0139 (-0.37)
-0.0523* (-1.76)
0.0459 (-1.43)
0.0305*** (-4.7)
-0.0101*** (-2.89)
yes
1618
-694.005
620.938
29.39
-0.0119 (-0.32)
-0.0511* (-1.66)
0.0402 (-1.24)
0.032*** (-4.98)
-0.0081** (-2.33)
Yes
1618
-634.426
588.486
35.45
2
(-3.01)
(-1.16)
(-3.98)
(-0.44)
0.1712***
0.0568
-0.1712***
0.0196
1
(-2.94)
(-1.15)
(-3.87)
(-0.48)
0.0311*** (-4.93)
-0.0082** (-2.45)
yes
1618
-636.833
584.126
35.21
-0.0529* (-1.75)
0.1687***
0.0577
-0.1656***
0.0214
(-2.98)
(-1.1)
(-3.78)
(-0.34)
0.0309*** (-4.87)
-0.0077** (-2.31)
yes
1618
-642.969
593.559
34.58
0.1705***
0.0543
-0.1608***
0.015
*,**,*** indicates significance at 10%, 5% and 1% level respectively; observations are clustered by household, robust standard errors reported;
probability change (%) in response to a change of the regressors at mean.
Variables
(CONTINUED)
TABLE 2
161
162
Pinger
163
164
Pinger
Several robustness checks have been performed to see how the signicance of variables changes with different model specications and to the
inclusion of further variables. First of all, the variable year of rst
departure was dropped, because uncertainty in the imputation adds
extra variance that can generate a bias of results and yield incorrect
standard errors and test statistics. Yet, the exclusion of that variable
hardly affects the coefcients or standard errors of the other variables.
As a second specication check, the variables indicating legal migration,
legal employment and residence permit were dropped, because a certain
degree of endogeneity bias may arise if migrants that want to stay permanently are also more likely to make an effort to obtain a correct legal
status for migration and work. Again the results are not much affected
except for the fact that the dummy for employment in low-wage sectors
suddenly becomes signicant if residence permit is dropped, indicating
that people in low-wage sectors have more difculties to obtain a legal
status.
Apart from the variables reported in the output, several other specications have been examined. Thus for example, the number of elderly
household members was included in the model as well as a variable for
the number of male or female household members, but both variables
turned out to be unimportant for the return decision. Apart from that
age squared also proved insignicant, indicating that there is no quadratic relationship between the age of a migrant and his her return decision.2 Moreover, it was examined whether a larger migrant community
at the destination affects the return decision, assuming that more peers
abroad increase the likelihood of stay. Yet, all covariates that reect the
size of the migrant community were found to be redundant.
The inuence of the return decision on remittance behaviour
This section focuses on the question of how the return decision inuences the amount of remittances sent home. Motives for sending remittances are assumed to be merely altruistic for permanent migrants, while
for temporary migrants the sending of remittances can be viewed a special form of savings.
The results of the tobit estimations are displayed in Table 3. As
expected, the coefcient for permanent is signicantly negative, indicating that migrants who choose to stay permanently abroad remit a
lower overall amount. To learn something about the size of the impact
of the return decision marginal effects were computed. The latter are
2009 The Author
International Migration 2009 IOM
165
TABLE 3
THE IMPACT OF THE RETURN DECISION ON REMITTANCES (MARGINAL EFFECTS)
Variables
Permanent
Household traits
No of persons in household
% children (<15 years)
No of migrants in household
Nuclear
Living standard before migration: good
Living Standard before migration: bad
% of adults with higher education
Age of household head
Family expenditures
Personal characteristics
Age
Male
Married
Primary education
Tertiary education
Migration information
Low-wage sector
Upper-middle wage sector
High-wage sector
EU
CIS
Seasonal migrant
Years remitted
Years remitted2
Constant
N
Log likelihood
-0.3051**
(-2.11)
-0.2757**
(-1.96)
-0.2772**
(-1.99)
0.071*
(1.82)
0.0039
(1.19)
-0.2208***
(-3.05)
0.3212**
(2.25)
0.515***
(4.64)
-0.1314
(-0.55)
0.0812**
(2.2)
0.0786**
(2.14)
-0.2293***
(-3.23)
0.3631***
(2.78)
0.5030***
(4.54)
-0.1399
(-0.59)
-0.2273***
(-3.21)
0.3624***
(2.79)
0.5005***
(4.54)
-0.1334
(-0.57)
-0.002
(-0.31)
0.0206
(0.16)
0.1208
(0.89)
0.0219
(0.08)
0.1672
(1.47)
-0.0033
(-0.55)
-0.0033
(-0.55)
0.0432
(0.15)
0.1578
(1.39)
0.0527
(0.19)
0.1488
(1.34)
-0.0123
(-0.08)
-0.1248
(-0.53)
-0.0665
(-0.34)
0.3198*
(1.68)
-0.1042
(-0.54)
-0.1299
(-1.02)
0.0008***
(6.05)
-0.0000***
(-4.41)
5.5019***
(16.13)
713
-1239.753
0.0391
(0.3)
-0.0365
(-0.16)
-0.1016
(-0.52)
0.3101*
(1.65)
-0.1257
(-0.67)
0.0008***
(6.17)
-0.0000***
(-4.51)
5.5800***
(16.8)
713
-1241.540
0.4206***
(3.75)
0.0008***
(6.25)
-0.0000***
(-4.56)
5.4906***
(19.09)
713
-1242.080
166
Pinger
TABLE 3
(CONTINUED)
Variables
AIC
Pseudo R2
Left-censored observations (<=0)
Uncensored observations
Right-censored observations
2523.505
6.08
16
697
0
2519.081
5.95
16
697
0
2512.161
5.91
16
697
0
*,**,***indicates significance at 10%, 5% and 1% level respectively, observations are clustered by household, robust standard errors reported.
CONCLUSION
The present research paper sheds light on the issue of temporary and
permanent migration not only with respect to the determinants of the
migrants return decision, but also concerning their remittance
2009 The Author
International Migration 2009 IOM
167
behaviour. Using a new dataset on outward migration from the Republic of Moldova, the determinants of the decision to return or stay have
been examined, offering additional insights into what inuences the
return decision. Furthermore, the difference in remittances sent between
these two groups of migrants has been assessed.
Concerning the decision to stay abroad, this research identies the key
factors that inuence the return decision: relationships and family ties at
home and abroad, the perceived economic situation in the source country, the relative wage differential, integration costs and migration networks. First, the ndings show that emotional ties with many loved
ones at home reduce the likelihood of leaving permanently, while family
presence abroad increases it. At the same time, the number of children
(younger than 15) in the household has no inuence on the return decision. Instead, herding effects seem to be strong as migrants are much
inuenced in their return decision by the behaviour of other migrants
from the same district, indicating that networks differ for temporary
and permanent migrants. Second, a considerable push factor constitutes
frustration with the economic situation at home and abroad. Third, high
relative wages abroad foster the stay abroad as does a longer migration
experience. Last, if residence and work abroad is legalized this considerably reduces the likelihood of return.
With respect to the remittance patterns of temporary and permanent
migrants, the results provide evidence that temporary migrants remit a
net value of around 30 per cent more per year than permanent
migrants. This is a surprising and relevant result in the case of Moldova, because temporary migrants usually reside in lower income countries than their permanent counterparts. Although part of this
discrepancy may be explained by higher living costs in high-wage destinations, the difference in overall remittance amounts is quantitatively
important. These ndings underline the presumption that temporary
migrants transfer most of their funds to a point after return, i.e. that
remittances and savings for home consumption are the main purpose
of migration.
Policy implications arising from the present study suggest that it is in
the interest of source countries like Moldova to foster the return of
migrants in order to ensure higher remittances, whilst keeping in mind
that return and remittances are not a panacea and sound policies and a
decent economic situation are important prerequisites for repatriation
policies to be effective (Pantiru et al., 2007).
2009 The Author
International Migration 2009 IOM
168
Pinger
169
NOTES
1. For the specic case of Moldova, these may be migrants who are now seasonal workers in Russia who want to accumulate enough money to be able
to settle in Western Europe at a later point in time.
2. Dustmann also points out that a useful denition for return migration for
empirical work should be oriented on ex-ante intentions rather than on expost realizations (2000: 21).
3. The survey was organized by IOM Moldova, implemented by CBSAXA
opinion Research Company and nanced by the Swedish International
Development Cooperation Agency (SIDA).
4. Note that the answer to the questions concerning migration was either
given by the migrant himself or, if not currently present in the household,
by another family member.
5. It has to be acknowledged that only those permanent migrants who are still
in contact with their (ex)families are included in the analysis, that is the
amount of permanent migrants in the sample is likely to be biased downwards.
6. Moldova counts 36 districts. In every district around 350 people were sampled of which around 50 are migrants.
7. Note that the approach of including only migrant households in the analysis could potentially bias the results if the error term of the equation that
determines the return decision was correlated with the error term of the
equation that describes the decision to migrate. Yet, as shown by Gorlich
and Trebesch, sample selection should not be an issue here (2008).
8. The survey contains information about the overall amount of remittances
sent by each migrant. Yet, the answers given to these questions are often
missing, which leads to a further reduction of the sample size (713
migrants, 621 households).
REFERENCES
Acosta, P.
2006 Labor supply, school attendance, and remittances from international migration: The case of El Salvador, Policy Research
Working Paper Series 3903, The World Bank.
Amin, M., and A. Mattoo
2005 Does temporary migration have to be permanent?, Policy
Research Working Paper Series 3582, The World Bank, http://
ideas.repec.org/p/wbk/wbrwps/3582.html.
Bauer, T.K., and M. Sinning
2005 The savings behavior of temporary and permanent migrants in
Germany, IZA Discussion Papers 1632, Institute for the Study
of Labor (IZA).
170
Pinger
Borjas, G.J.
1985 Assimilation, changes in cohort quality, and the earnings of
immigrants, Journal of Labor Economics, 3(4): 46389.
1987 Self-selection and the earnings of immigrants, American Economic Review, 77(4): 53153.
1994 The economics of immigration, Journal of Economic Literature,
32(4): 16671717.
1995 The economic benets from immigration, Journal of Economic
Perspectives, 9(2): 322.
Carrington, W.J., et al.
1996 Migration with endogenous moving costs, American Economic
Review, 86(4): 90930.
Chiswick, B.R.
1978 The effect of Americanization on the earnings of foreign-born
men, The Journal of Political Economy, 86(5): 897921.
IDC (International Development Committee)
2004 Migration and development: How to make migration work for
poverty reduction, mimeo, House of Commons, HC 79-II.
Cuc, M., et al.
2005 Migration and remittances in Moldova, technical report, International Monetary Fund.
Docquier, F., and H. Rapoport
2004 Skilled migration: the perspective of developing countries, Policy Research Working Paper Series 3382, The World Bank.
Drinkwater, S., et al.
2003 The Labour Market Effects of Remittances, Hamburgisches WeltWirtschafts-Archiv.
Dustmann, C.
1992 Do We Stay Or Not? Return Intentions of Temporary Migrants,
European University Institute, Florence.
1997 Differences in the labor market behavior between temporary and
permanent migrant women, Labour Economics, 4(1): 2946.
1999 Temporary migration, human capital, and language uency of
migrants, Scandinavian Journal of Economics, 101(2): 297314.
2000 Temporary migration and economic assimilation, IZA Discussion Papers 186, Institute for the Study of Labor (IZA).
2003 Return migration, wage differentials, and the optimal mgration
duration, European Economic Review, 47(2): 353369.
Dustmann, C., and O. Kirchkamp
2002 The optimal migration duration and activity choice after
re-migration, Journal of Development Economics, 67(2): 351372.
Galor, O., and O. Stark
1990 Migrants Savings, the Probability of Return Migration and
Migrants Performance, International Economic Review, 31(2):
463467.
1991
171
172
Pinger
173
Schrooten, M.
2006 Workers remittances to former Soviet States, Discussion Paper
Series 476, Institute of Economic Research, Hitotsubashi University.
Stark, O., et al.
1997a
A brain gain with a brain drain, Economic Letters, 55: 22734.
1997b Migrants Savings, Purchasing Power Parity, and the Optimal
Duration of Migration, Economics Series 44, Institute for
Advanced Studies.
Sussmuth, R.
2001 Zuwanderung gestalten, Integration fordern, mimeo, Bundesminister des Inneren.
Taylor, E. J.
1999 The new economics of labour migration and the role of remittances in the migration process, International Migration, 37: 63
88.
Copyright of International Migration is the property of Wiley-Blackwell and its content may not be copied or
emailed to multiple sites or posted to a listserv without the copyright holder's express written permission.
However, users may print, download, or email articles for individual use.