Discussion Paper No. 1376 provides a theoretical and empirical analysis of human capital investments of temporary migrants. Research Fellow Christian Dustmann distinguishes two types of temporary migrants: those who immigrate on a fixed contract and those who are free to choose their time of return optimally. On that premise, he develops a theoretical model to analyse human capital investment of migrants.

The second part of the paper provides an empirical analysis of the acquisition of written- and spoken-language capital. It is based on micro-data for migrants to Germany which contains unique information on the expected future duration of the migrant in the host country. It is used to construct a measure of the duration abroad. The results of the simultaneous model support the hypothesis that the acquisition of country-specific human capital is determined by the time spent in the host country.

Temporary Migration, Human Capital, and Language Fluency of Migrants
Christian Dustmann