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Is there such a thing as Migration of Poverty in Albania? ABCDE Conference Tirana, Is there such a thing as Migration of Poverty in Albania? ABCDE Conference Tirana, June 10 -11, 2008 Jessica Hagen-Zanker Carlo Azzarri

Introduction • Migration most important social, political & economic phenomenon in Albania since 1990 Introduction • Migration most important social, political & economic phenomenon in Albania since 1990 • Internal migration also important, but understudied • Internal migration mainly rural to urban/peri-urban areas • In ‘ 90 s urban population increased by 14%, but not much known on living conditions of migrants What is the impact of internal migration on migrant households? • Since 1990 poverty decreases, especially in rural Has poverty relocated from rural to urban areas?

Novelty of the paper • Focus on impact of internal migration • Albania as Novelty of the paper • Focus on impact of internal migration • Albania as quasi-experimental case: no internal or international migration before 1990 • - Unique dataset Households over-sampled in peri-urban areas Retrospective information on migration Information on households in 1990 (controls)

Data • • - Data LSMS 2005 (nationally representative) 3840 households 200 peri-urban households Data • • - Data LSMS 2005 (nationally representative) 3840 households 200 peri-urban households oversampled Groups RNM = Rural household, head did not migrate internally - PNM = Peri-urban household, head did not migrate internally - PM = Peri-urban household, head did migrate internally

Descriptive statistics I • Migrants to peri-urban younger & less educated • Migrants to Descriptive statistics I • Migrants to peri-urban younger & less educated • Migrants to peri-urban more likely to be unemployed & working fewer hours Employed in casual construction sector • Rural households with more international migrants than peri-urban specialization?

Descriptive statistics II: Income and consumption RNM = Rural household, head did not migrate Descriptive statistics II: Income and consumption RNM = Rural household, head did not migrate internally PNM = Peri-urban household, head did not migrate internally PM = Peri-urban household, head did migrate internally

Descriptive statistics III • Peri-urban migrants show worse housing condition, both compared to rural Descriptive statistics III • Peri-urban migrants show worse housing condition, both compared to rural non-migrant households & own situation in 1990 (in terms of house type, number of rooms, water access & quality) • Peri-urban migrant children least likely to be sent to primary school (70%) & as unlikely to secondary school as rural households (33%) - Schools far - Teenagers work as much as in rural areas - Households do not consider education as important as peri-urban non-migrants do

Descriptive statistics IV • Comparison over time (whether moved 90 -94, 9599, 00 -04) Descriptive statistics IV • Comparison over time (whether moved 90 -94, 9599, 00 -04) • Internal migrants move for different reasons 1) Pioneers: to improve life more likely to send children to school 2) Crisis movers: out of need (pyramid savings scheme crisis) poor housing & employment 3) Followers: to make money highest income gains • Different expectations different impacts

Econometric analysis • Aim: measuring impact of internal migration on outcome of interest (e. Econometric analysis • Aim: measuring impact of internal migration on outcome of interest (e. g. income) Two Solutions: • Propensity Score Matching Compare peri-urban internal migrant households to very similar non -migrant rural household • Instrumental Variable Analysis Replace explanatory variable with another variable (IV) correlated with explanatory variable only

Propensity Score Matching Results Dependent variable Income/ capita Consumption/ capita ATT 2257. 37*** 658. Propensity Score Matching Results Dependent variable Income/ capita Consumption/ capita ATT 2257. 37*** 658. 34 s. e. 575. 19 500. 73 ATU 2525. 05 334. 48 ATE 2498. 28 366. 76 Confirms descriptive statistics ATT=Average treatment effect for treated; ATU=Average treatment effect for un-treated ATE=Average treatment effect for population

Instrumental Variables • Instrumental variables used: 1) Wealth in 1990 influences decision to move, Instrumental Variables • Instrumental variables used: 1) Wealth in 1990 influences decision to move, but unlikely to affect current income due to the rapid changes that took place in Albania 2) Housing variables 1990 impacts decision to move, but not current income

Instrumental Variables Results Dependent variable: Log income per capita Instruments Coefficient & p-value of Instrumental Variables Results Dependent variable: Log income per capita Instruments Coefficient & p-value of treat_year No of obs. Anderson. Rubin Wald test p-value Hansen J statistic p -value Kleibergen. Paap Fstatistic Wealth 1990 House type 1990 0. 24 (0. 033) 1623 0. 039 0. 71 5. 51 Wealth 1990 Water source 1990 0. 25 (0. 049) 1623 0. 043 0. 82 4. 20 Wealth 1990 Toilet type 1990 0. 35 (0. 014) 1623 0. 000 0. 48 3. 37 Wealth 1990 Rooms/ capita 1990 0. 18 (0. 065) 1623 0. 070 0. 37 4. 30 • All the tests successful, although instruments could be stronger Treat_year= number of years since the household has moved, 0 for rural non-movers Other explanatory variables omitted for space reason

Conclusions • Migrants are better off in terms of income • In peri-urban monetary Conclusions • Migrants are better off in terms of income • In peri-urban monetary poverty amongst migrants still high compared to non-migrants migration of poverty? • Migrants are worse off in terms of housing, education, health, access to utilities, access to stable employment Living expenses increase > income gain

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