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 Internal migration also important, but understudied Internal migration mainly rural to urban/peri-urban areas In ‘90s 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 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 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 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 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 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, 95-99, 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.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*** 658.34 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: 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 treat_year No of obs. Anderson-Rubin Wald test p-value Hansen J statistic p-value Kleibergen-Paap F-statistic Wealth 1990 House type 1990 0.24 (0.033) 1623 0.039 0.71 5.51 Water source 1990 0.25 (0.049) 0.043 0.82 4.20 Toilet type 1990 0.35 (0.014) 0.000 0.48 3.37 Rooms/ capita 1990 0.18 (0.065) 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 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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