Three essays on the effects of social transfers, non-farm income, and international migration: Microeconometric evidence from Albania

The first essay uses the 2002 and 2005 Albanian Living Standards Measurement Surveys (ALSMS02 & ALSMS05) to estimate the effects of participation in the Ndihma Ekonomike (NE) social assistance program and old-age pensions on household welfare. Given the lack of consumption panel data, the empirical methodology is propensity score matching. We find that NE households record lower per capita consumption, and exhibit a higher degree of discontent with life than their comparators. These differences are induced by the trends in urban areas. Alternatively, the avenge differences in all welfare outcomes between pensioners and non-pensioners are not statistically significant, regardless of urban or rural residence. The impact of NE on welfare may be driven by negative labor response to program transfers. We test this hypothesis using the Albanian Panel Survey and recover a large and negative effect of household NE receipts on individual labor supply measured in tertres of labor force participation and number of hours or weeks worked. The impact is only in urban areas, and larger among women. Conversely, pension receipts do not significantly impact any labor outcomes of interest. The second essay uses the ALSMS05 to explore the impact of Waal household nonfarm income generating activities on agricultural expenditures and technical efficiency. Our results show that overall, Albanian rural households utilize their non-faint earnings not to invest in efficiency-increasing technologies, but to move out of crop production. We derive similar findings when the same relation is estimated separately for commercial and subsistence farmers. However, among commercial farmers, household non-farm earnings are positively associated with livestock expenditures. The last essay employs the ALSMS05 to assess the impact of household past migration experience on non-farm business ownership. Our results indicate that household past migration experience exerts a positive impact on non-farm business ownership. In particular while one additional year in Greece increases the probability of business ownership by roughly 7 percent, a similar experience in Italy or further destinations raises the likelihood by over 30 percent. Although household past migration experience for the period of 1990--2000 is positively associated with the probability of owning a non-farm enterprise, a similar impact does not materialize for the recent period of 2001--2004.