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The Vanishing Farm? The Impact of International Migration on Albanian Family Farming

The Vanishing Farm? The Impact of International Migration on Albanian Family Farming. Juna Miluka Gero Carletto Benjamin Davis Alberto Zezza. Outline. Background and Motivation Data Empirical Strategy Estimation Results Conclusions. Background. Agriculture: a sector in turmoil

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The Vanishing Farm? The Impact of International Migration on Albanian Family Farming

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  1. The Vanishing Farm? The Impact of International Migration on Albanian Family Farming Juna Miluka Gero Carletto Benjamin Davis Alberto Zezza

  2. Outline • Background and Motivation • Data • Empirical Strategy • Estimation Results • Conclusions

  3. Background • Agriculture: a sector in turmoil • Collapse of Communism • Rapid de-collectivization; 93% of cooperative land & 79% of state land privatized by 1993 • Agriculture’s contribution to GDP fell from 42.5% in 1992 to 28.1% in 2001 • Very small land sizes (≈ 1 ha), but highly fragmented (4 plots) • Over 90% of farmers use only family labor • Agriculture still employs 50% of workforce

  4. Background (cont’d) • The migration explosion • Country on the move • Rural population fell by over 15% since 1990 • By 1996, 1/3 of the labor force had migrated • 50%+ of hh exposed to int’l migration • 1/3 hh currently with int’l migrant • 2/3 from rural areas (upward trend) • Private transfers 14% of GDP (>2002); Muco puts figure at 25% in 1997

  5. Migration and Agriculture • Despite magnitude of migration, and the vast potential of migration and remittances for agriculture, little evidence exists on relation and impact • Empirical literature evenly split • Different channels • income • credit • insurance • labor

  6. Migration and Agriculture (cont’d) Specific hypotheses: • Labor effort • Feminization of agriculture • Non-labor input use (to compensate for labor loss?) • Technical efficiency ?

  7. Data • 2005 Living Standards Measurement Survey (ALSMS05) • INSTAT and the World Bank • 3,640 total households • 1,849 rural households • Extended Migration Module • Separate Agriculture Module (Fall)

  8. Model specifications • Dependent Variables • Agricultural Labor (by gender) • Non-labor input expenses in agriculture • Technical efficiency • Income • Independent Variables • Migration (IV) • Human Capital • Natural and Physical Capital • Community and Regional Characteristics

  9. Descriptive Statistics / 1

  10. Descriptive Statistics / 2

  11. Empirical Strategy • Instrumental Variable Tobits • Instruments • Languages • Migration Network • Distance to borders • IV Diagnostics

  12. Estimation Results - Labor

  13. Estimation Results (cont’d)

  14. Estimation Results - Income

  15. Conclusions • Moving out of agriculture? • Fewer hours worked in total and per capita terms • Less reduction for women • Less investments in productivity-enhancing and time-saving farm technologies • Investments in livestock production • No Impact on Crop Income and TE • Higher incomes (RNF?)

  16. Policy Implications • Stagnating Agriculture • Forgone opportunity? • Managing withdrawal • Promote better use of migrants’ resources in agriculture (and RNF?)

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