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The impact of emigration on source country wages : evidence from the Republic of Moldova

  • Bouton, Lawrence
  • Paul, Saumik
  • Tiongson, Erwin R.

Thousands of Moldovans emigrated for work abroad over the last few years following nearly a decade of economic stagnation in their home country. At about 30 percent of the labor force, Moldova's emigrant population is in relative terms among the largest in the world. This study uses a unique household survey to examine the impact of emigration on wages in Moldova. The authors find a positive and significant impact of emigration on wages and the result is robust to the use of alternative samples and specifications. The size of the emigration coefficient varies depending on the sample and model specification, but the baseline result suggests that, on average, a 10 percent increase in the emigration rate is associated with 3.2 percent increase in wages. At the same time, there is evidence of significant differences across economic sectors in the estimated effect of emigration on wages. The authors speculate and provide some evidence that offsetting changes in labor demand, as revealed by information on employment growth by sector, may help explain some of the heterogeneity.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5764.

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Date of creation: 01 Aug 2011
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Handle: RePEc:wbk:wbrwps:5764
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  1. Pia M. Orrenius & Madeline Zavodny, 2003. "Does immigration affect wages? A look at occupation-level evidence," Working Papers 0302, Federal Reserve Bank of Dallas.
  2. Abdurrahman Aydemir & George J. Borjas, 2007. "Cross-Country Variation in the Impact of International Migration: Canada, Mexico, and the United States," Journal of the European Economic Association, MIT Press, vol. 5(4), pages 663-708, 06.
  3. Mishra, Prachi, 2007. "Emigration and wages in source countries: Evidence from Mexico," Journal of Development Economics, Elsevier, vol. 82(1), pages 180-199, January.
  4. Vijverberg, Wim P M, 1995. "Dual Selection Criteria with Multiple Alternatives: Migration, Work Status, and Wages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 159-85, February.
  5. Chiquiar, Daniel, 2005. "Why Mexico's regional income convergence broke down," Journal of Development Economics, Elsevier, vol. 77(1), pages 257-275, June.
  6. Dennis Görlich & Toman Omar Mahmoud & Christoph Trebesch, 2007. "Explaining Labour Market Inactivity in Migrant-Sending Families: Housework, Hammock, or Higher Education," Kiel Working Papers 1391, Kiel Institute for the World Economy.
  7. Robert E.B. Lucas, 2005. "International Migration and Economic Development," Books, Edward Elgar, number 3826.
  8. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
  9. Rachel M. Friedberg, 2001. "The Impact Of Mass Migration On The Israeli Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 116(4), pages 1373-1408, November.
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