Temporary Migration for Long-term Investment
In the presence of credit constraints, temporary migration abroad provides an effective strategy for workers to accumulate savings to finance self-employment when they return home. This paper provides direct evidence of this link and its effects on...
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| Format: | Working Paper |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/504291627493488985/Temporary-Migration-for-Long-term-Investment http://hdl.handle.net/10986/36040 |
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okr-10986-360402021-07-30T05:10:38Z Temporary Migration for Long-term Investment Bossavie, Laurent Gorlach, Joseph-Simon Ozden, Caglar Wang, He MIGRANT LABOR ENTREPRENEURSHIP CREDIT CONSTRAINT ACCESS TO FINANCE MIGRATION COSTS TEMPORARY MIGRATION In the presence of credit constraints, temporary migration abroad provides an effective strategy for workers to accumulate savings to finance self-employment when they return home. This paper provides direct evidence of this link and its effects on workers’ employment trajectories by using a new, large-scale survey of temporary migrants from Bangladesh. It constructs and estimates a dynamic model that establishes connections between asset accumulation and credit constraints, and, thus, between workers’ migration and self-employment decisions. Interlinked impacts also emerge from simulations of three key policy interventions that target migration costs or domestic credit constraints for entrepreneurship. Lowering migration costs increases emigration, reduces the age at which workers depart, and reduces the duration of their time abroad, which together lead to higher savings and domestic self-employment. Reducing the interest rate for entrepreneurial loans reduces migration and savings levels, undercutting the positive effects on business creation at home. Correcting workers’ inflated perceptions about overseas earnings potential reduces emigration rates and durations, triggering a decrease of both repatriated savings and self-employment in Bangladesh. The findings, which have implications for migrant-sending countries, highlight the need for policies to take into account the linkages between migration and self-employment decisions. 2021-07-29T13:05:10Z 2021-07-29T13:05:10Z 2021-07 Working Paper http://documents.worldbank.org/curated/en/504291627493488985/Temporary-Migration-for-Long-term-Investment http://hdl.handle.net/10986/36040 English Policy Research Working Paper;No. 9740 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia Bangladesh |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
MIGRANT LABOR ENTREPRENEURSHIP CREDIT CONSTRAINT ACCESS TO FINANCE MIGRATION COSTS TEMPORARY MIGRATION |
| spellingShingle |
MIGRANT LABOR ENTREPRENEURSHIP CREDIT CONSTRAINT ACCESS TO FINANCE MIGRATION COSTS TEMPORARY MIGRATION Bossavie, Laurent Gorlach, Joseph-Simon Ozden, Caglar Wang, He Temporary Migration for Long-term Investment |
| geographic_facet |
South Asia Bangladesh |
| relation |
Policy Research Working Paper;No. 9740 |
| description |
In the presence of credit constraints,
temporary migration abroad provides an effective strategy
for workers to accumulate savings to finance self-employment
when they return home. This paper provides direct evidence
of this link and its effects on workers’ employment
trajectories by using a new, large-scale survey of temporary
migrants from Bangladesh. It constructs and estimates a
dynamic model that establishes connections between asset
accumulation and credit constraints, and, thus, between
workers’ migration and self-employment decisions.
Interlinked impacts also emerge from simulations of three
key policy interventions that target migration costs or
domestic credit constraints for entrepreneurship. Lowering
migration costs increases emigration, reduces the age at
which workers depart, and reduces the duration of their time
abroad, which together lead to higher savings and domestic
self-employment. Reducing the interest rate for
entrepreneurial loans reduces migration and savings levels,
undercutting the positive effects on business creation at
home. Correcting workers’ inflated perceptions about
overseas earnings potential reduces emigration rates and
durations, triggering a decrease of both repatriated savings
and self-employment in Bangladesh. The findings, which have
implications for migrant-sending countries, highlight the
need for policies to take into account the linkages between
migration and self-employment decisions. |
| format |
Working Paper |
| author |
Bossavie, Laurent Gorlach, Joseph-Simon Ozden, Caglar Wang, He |
| author_facet |
Bossavie, Laurent Gorlach, Joseph-Simon Ozden, Caglar Wang, He |
| author_sort |
Bossavie, Laurent |
| title |
Temporary Migration for Long-term Investment |
| title_short |
Temporary Migration for Long-term Investment |
| title_full |
Temporary Migration for Long-term Investment |
| title_fullStr |
Temporary Migration for Long-term Investment |
| title_full_unstemmed |
Temporary Migration for Long-term Investment |
| title_sort |
temporary migration for long-term investment |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/504291627493488985/Temporary-Migration-for-Long-term-Investment http://hdl.handle.net/10986/36040 |
| _version_ |
1764484301784612864 |