Juna Miluka Gero Carletto Benjamin Davis Alberto Zezza 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 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 LAND ALLOCATION PATTERN: Fodder remains most important, about 46% Cereals slight decline (particularly wheat vs. corn), 38% Vegetables, potatoes and beans, no change

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

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

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

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)

Model specifications Dependent Variables Independent 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

Descriptive Statistics / 1   Migrant Non-Migrant Male Labor in Agriculture (hrs/year) 1,394.92 1,684.86 Percapita Male Labor in Ag. (hrs/year) 927.51 978.53 Female Labor in Ag. (hrs/year) 1,521.29 1,506.03 Percapita Female Lab. in Agriculture (hours/year) 910.46 949.24 Crop Income (Crop only) 51,591 51,942 Total Agricultural Income(leks) 391,668 358,685 Equipment Rental (leks) 15,474 11,427 Chemical Inputs (leks) 13,521 9,973 Livestock Expenditure (leks) 10,400 10,821

Descriptive Statistics / 2   Migrant Non-Migrant Land Area (Square Meters) 11,762.2 8,216.1 Female Headed Households (%) 10.4 4.8 Highest Level of Education in the Household 9.3 10.1 Coastal region 45.0 26.4 Distance Index (Proximity to Public Facilities) 0.20 0.34 Land Disputes (% of hh) 68.4 61.2 Spoke Italian or Greek in 1990 (%) 13.8 8.1 Minimum Distance From Border Crossings 120.0 112.1 Percentage of Males 20-39 in the Municipality 13.7 14.4

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

Estimation Results - Labor Male Family Labor in Agriculture Female Family Labor in Agriculture Total Percapita Migration - Female Headed Household Age of Head of Household + Age Head Squared Highest Education in HH Natural/Physical Capital index Crime in the Community

Estimation Results (cont’d) Chemicals Equipment rental Livestock exp. Migration - + Age of Household Head Age Head Squared Land Area (sqm) Household plots (No) Animals owned (TLU)

Estimation Results - Income Total income Migration + Age of Head of Household - Age Head Squared Highest Education in HH Land Area (sqm) Animals owned (TLU) Land disputes

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?)

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