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International Migration, Remittance Income, and Income Diversification Strategies among Rural Farm Households in Transitional Albania

Ayuba Seidu and Gulcan Onel

No 205517, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: The overarching consensus in the applied migration literature is that international migration is typically used to transition out of agricultural sector by rural households in transition economies. In this paper, using data on rural Albanian households, we examine whether international migration of some household members affects the household’s nonfarm activity choices and earnings generated from these activities. In addition, we test whether remittance income received from migrant household members have an indirect effect on households’ agricultural production. We find no apparent relationship between nonfarm activity choice and the number of international migrants in the farm household. However, we find that remittance income is positively and significantly related to households’ propensity to reallocate farm labor to nonfarm self-employment activities, resulting in higher income from non-farm self-employment. In addition, remittance income affects farm income in a positive and significant way. This suggests that previous studies likely underestimated the overall impact of international migration on agricultural production in rural Albania, as they usually ignored the additional remittance income effect. Overall, our empirical findings support the basic tenets of rural income diversification, where the farm household has a diversified portfolio of income-generating activities, in addition to farming. The results suggest that international migration facilitates income diversification among Albanian farm households rather than their exit out of agriculture.

Keywords: Consumer/Household Economics; International Development; Labor and Human Capital (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-dev, nep-mig and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205517

DOI: 10.22004/ag.econ.205517

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