Using uncertainty about the future returns to migration, the option value theory of migration can explain low migration rates in spite of huge wage differences. This paper presents the theory in a simple two-period framework and uses ethnic Germans in the CIS to find empirical support for it....

Average education of new immigrants from the East European countries and the former Soviet Union (FSU) in Israel declined during the last ten years. I present a simple two-period model of migration with uncertainty about future conditions in both countries and estimate a reduced form, using data...