This paper develops a model of interlinkage in the credit market and labor market. A credit-cum-labor contract provides the necessary funds to undertake an investment in migration, given the absence of sufficient collateral. The optimal interlinked contract eliminates the scope for strategic...

This paper considers migration as an investment decision. It develops a continuoustime stochastic model to explain the optimal timing of migration, in the presence of ongoing uncertainty over wage differentials. The results show that individuals prefer to wait before migrating, even if the...