This dissertation contains three distinct chapters, which discuss the concepts of
unemployment, migration, and remittances. The following paragraphs succinctly describe their
content.
For most any government, it is a primary goal to keep unemployment levels close to
natural, as well as to reduce the transition rate for jobless people looking to rejoin the labor force.
In order to accomplish such targets, it is important to understand what factors affect an
individual’s employment decisions. This chapter tests the particular impact of remittances and
unemployment benefits on unemployment duration, utilizing data from the 1995 Bulgarian
Integrated Household Survey. The primary method for evaluating the hypotheses is survival
analysis through incremental Cox proportional hazard models. The findings indicate that
unemployment benefits have a strong negative effect on labor force participation, but no
significant effect of remittances can be confirmed. In conclusion, certain government initiatives,
like unemployment benefits, can potentially undermine the original intention of maintaining a
stable and persistent labor market.
Internal migration is recognized as an important factor which affects regional economic
development through the movement of labor from rural to urban areas. Since development is
predicated upon increase in income, which most readily occurs when labor moves away from
agriculture and into more industrial and service-oriented jobs, there is ample economic literature
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that studies and attempts to pinpoint the main determinants of this process. This chapter
examines the neoclassical theory of migration utilizing a data set that covers migration in
Bulgaria from 2006 to 2011. The main hypothesis is whether wage differentials and opportunity
for employment are the driving factors of both labor-motivated migration and non-economic
migration. The data set utilized in this analysis is in a panel data format; therefore the method
used for testing the hypothesis involves building different regression models for random and
fixed effects. The models provide results contrary to prediction of theory – it seems that
economic incentives have a greater effect on migration of people who state that they are moving
for purposes other than employment, yet those same incentives have an inconclusive effect on
labor migration.