Return Migration and Occupational Change

Abstract

Return migrants exhibit a high tendency for self‐employment over waged employment. Using cross‐ sectional data from Pakistan, the paper explores the determinants of this choice. Retirement from the domestic labor market is not a reason for opting for self‐employment. The preference for non‐farm self‐employment is a two‐period process of self‐selection. Migrants who expect to switch occupation to non‐farm self‐employment upon return save more from high transitory overseas income than do their counterparts. Upon return, savings become a significant factor in the choice of self‐employment over waged employment. International migration and return have little influence on the choice of farm self‐employment.