THE ROLE OF THE TARGET SAVING MOTIVE IN GUEST WORKER MIGRATION - A THEORETICAL-STUDY

The return migration decision is modeled as a decision problem under uncertainty. In each period the guest worker has to decide whether to return home and to invest the capital in a small business or to stay in the host country and earn money as a worker for at least one further period. It is shown that the properties of the optimal saving and return migration strategies can be elegantly derived by formulating the migrant's decision problem as a Stopped Markovian Decision Process. This framework provides a lot of interesting testable hypotheses concerning remigration behaviour of a target saver.