Emigration and the Age Profile of Retirement Among Immigrants

44 Pages Posted: 15 Dec 2008

See all articles by Deborah A. Cobb-Clark

Deborah A. Cobb-Clark

School of Economics, University of Sydney; IZA Institute of Labor Economics

Steven Stillman

Free University of Bozen-Bolzano; IZA Institute of Labor Economics

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Abstract

This paper analyzes the relationship between immigrants' retirement status and the prevalence of return migration from the host country to their country of origin. We develop a simple theoretical model to illustrate that under reasonable conditions the probability of return migration is maximized at retirement. Reduced-form models of retirement status which control for the rate of return migration are then estimated using unique data on emigration rates matched to individual-level data for Australia. We find that immigrants, particularly immigrant women, are more likely to be retired than are native-born men and women with the same demographic, human capital, and family characteristics. Moreover, within the immigrant population, there is a negative relationship between the propensity to be retired and the return migration rate of one's fellow countrymen, particularly amongst men. This link is strongest for those individuals who are at (or near) retirement age and among those with the highest cost of return migration. These results suggest that the fiscal pressures associated with aging immigrant populations vary substantially across origin countries.

Keywords: retirement, immigrants, return migration, emigration, Australia

JEL Classification: J26, J01, J08

Suggested Citation

Cobb-Clark, Deborah A. and Stillman, Steven, Emigration and the Age Profile of Retirement Among Immigrants. IZA Discussion Paper No. 3874. Available at SSRN: https://ssrn.com/abstract=1315893 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Deborah A. Cobb-Clark (Contact Author)

School of Economics, University of Sydney ( email )

606 Social Sciences Bldg. (A02)
The University of Sydney
Sydney, NSW 2006
Australia
61435061387 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Steven Stillman

Free University of Bozen-Bolzano ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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