Temporary vs. permanent migration A decision theoretical approach

The decision problem of the guest worker as a target saver is considered. He plans to accumulate capital in the host country for investment in the home country after return migration. As the worker is supposed to be incompletely informed about the economic variables in the host country he might prolong his stay unexpectedly provided the economic conditions in the host country are unfavourable. Explicit conditions for the economic variables are given such that temporary migration turns into permanent migration.We are indebted to an anonymous referee for helpful comments.