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Migration, remittances, and wage-inflation spillovers: The case of Albania

Author

Listed:
  • Skufi, Lorena
  • Papavangjeli, Meri
  • Geršl, Adam

Abstract

Motivated by migration phenomena and wage-inflation spillovers, we investigate the relationship between the two and the built-in inflationary pressures of remittances. We establish a feedback loop between migration and inflation, and specify a simple dynamic model to identify the pass-through. We find that a permanent decline in the population of 1% leads to 0.8 percentage points of inflationary pressures in the midterm. Remittances induce excessive pressures. Supportive schemes such as an older retirement age and a higher labor force participation rate can partially mitigate inflationary pressures.

Suggested Citation

  • Skufi, Lorena & Papavangjeli, Meri & Geršl, Adam, 2025. "Migration, remittances, and wage-inflation spillovers: The case of Albania," Economic Systems, Elsevier, vol. 49(4).
    • Handle: RePEc:eee:ecosys:v:49:y:2025:i:4:s0939362525000354
    DOI: 10.1016/j.ecosys.2025.101323
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    Keywords

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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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