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Heiko Peters and Benjamin Weigert (2009)

Influence of Remigration on Wages of Immigrants*

In: Zeitschrift für Bevölkerungswissenschaft, Vol. 34, 3-4/2009, p. 299-316, Wiesbaden: VS Verlag für Sozialwissenschaften, ISSN: 0340-2398, DOI: 10.1007/s01253-010-0047-9

Abstract: We develop a search-theoretic labour market model where various groups of immigrant workers and native workers interact. The groups of immigrant workers only differ in their probability of leaving the host country. We can show theoretically that the probability of remigration is an important ingredient of the resulting wage distribution. Immigrants who do not intend to stay permanently in the host country – and who consequently are more likely to return to their home or any other country – receive a lower wage than native workers with the same productivity. Starting from the theoretical model, we estimate empirically the individual probability of remigration employing the data of SOEP. This result will then be used as explanatory variable in a wage regression. Our findings show that there is in fact a negative correlation between the probability of return and the wage level if all other features remain equal.

* peer-reviewed article (original German title: Einfluss der Rückkehrwahrscheinlichkeit von Einwanderern auf ihre Entlohnung)

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