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Human Capital, Market Imperfections, Poverty, and Migration. Evidence from Rural Albania

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  • E. Spolaore
  • J. Swinnen

Abstract

During transition, almost a quarter of the Albanian labour force migrated to EU countries.The vast majority migrated illegally and temporarily to work abroad. This paper analyzes the determinants of Albanian migration from rural areas based on a unique representative survey of rural households. The study confirms that those who migrated temporarily are mostly young, male, and single. Regional variations in migration reflect a combination of cultural and economic factors, including migration costs. However, we find that migrants do not come from the poorest rural households. Moreover, education has a positive, albeit non-linear, effect on the likelihood of migration. Migration is negatively related with household access to alternative income sources and reduced financial constraints but positively related with the presence and household’s access to migration networks. Policy implications are that aid programs and government initiatives to invest in rural infrastructure and rural education may have mixed effects on migration. A key policy target to reduce migration should be the creation of non-farm rural employment and rural households’ access to finance.

Suggested Citation

  • E. Spolaore & J. Swinnen, 2009. "Human Capital, Market Imperfections, Poverty, and Migration. Evidence from Rural Albania," Review of Business and Economic Literature, Intersentia, vol. 54(1), pages 22-46, March.
    • Handle: RePEc:sen:rebelj:v:54:i:1:y:2009:p:22-46
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    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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