In this dissertation I address issues related to international migration and its
economic impact on the migrants’ sending regions. For the empirical analysis
I use data from household surveys conducted in countries and regions where
the transition to a market economy, after the disintegration of the Soviet Union
and the end of the communist era in Central and Eastern Europe, is associated
with exceptionally large emigration.
The first chapter is based on household survey data from Armenia, Azerbaijan,
and Georgia and provides the first preliminary evidence on the scale of
recent emigration from the South Caucasus and its impact on the economic development
of the region. The large emigration flows from the South Caucasus
consist primarily of older male labor migrants to Russia. The findings suggest
that current migration from the South Caucasus does not involve mass emigration
of the skilled and the income gains from migration are large, but despite
the higher incomes earned abroad, the migrants’ households do not exhibit
higher propensity to spend on education. The significant correlation between
having a migrant household member and the presence of a family business in
Armenia, however, suggests that the migrants’ earnings and remittances have
the potential to relieve liquidity and risk constraints and contribute to the development
of the private sector in the South Caucasian economies.
In my second chapter I focus specifically on the effect of international migration
and remittances on the labor supply of the non-migrant household
members. For the empirical analysis I use the Albania 2005 Living Standards
Measurement Survey. The rich dataset allows me to control separately for the
effects of migration and remittances and to deal with the potential endogeneity
problems inherent in this type of analysis by instrumenting for the household
migration decision and remittance receipts. The expected negative impact on
unemployment, due to an income effect of remittances, among the female population
in Albania is not confirmed by the data. When an instrumental variable
approach is used, the predicted effects of migration and remittances on labor
supply appear significant only for males between the ages of 46 and 60. Afix
WORKING PAPER SERIES N. 18 - MAY 2011
ter instrumenting, for females and for older males I obtain large and positive
coefficients for having a migrant within the family and large and negative coefficients
for receiving remittances. Although the estimated effects for the females
are insignificant at conventional levels, the magnitudes and signs of all
coefficients suggest that the OLS estimates of the effect of migration are likely
biased downwards, while the OLS estimates of the effect of remittances are
biased upwards, compared to the true effects of these variables.
The third chapter (with Professor Randall K. Filer) draws upon previous
studies on migration from Albania. A large number of studies, based initially
on sporadic surveys of migrants and non-migrants and later based on
large, well-designed household surveys available to the research community,
deal with questions about Albanian migration and its consequences. Those
questions are particularly relevant as Albania’s potential EU membership is
considered. The chapter adds to the literature on migration from former communist
economies by being the first survey that compares the findings from
the existing studies on Albanian migration to derive conclusions on the consequences
of accession of Albania and other similarly affected countries to the
EU. The study is also a chapter in a larger publication on the effect of postenlargement
migration on the EU labor markets by the Institute for the Study
of Labor (IZA).