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Transcript of Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina...
![Page 1: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/1.jpg)
Welfare Effect of Foreign Migration and Remittances in Kosovo
Sachiko Miyata, World BankIrina Shaorshadze, Cambridge University
![Page 2: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/2.jpg)
Outline
1. Snapshot of Socio-Economic Indicators of Kosovo
2. Data Description
3. Methodology
4. Results
5. Conclusions and Policy Implications
![Page 3: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/3.jpg)
1. Socio-Economic Indicators of Kosovo
![Page 4: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/4.jpg)
Socio-Economic Indicators of Kosovo
• Poorest economy in Europe, GDP per capita 1,759 Euro (2008)
• 45% of households live in Poverty, 15% live in Extreme Poverty
• Remittances are the second largest source of income (15.1% of GDP)
• Ranks #11 in the world in terms of share of remittances to GDP
• 30% of households have migrant relations abroad
• Over 20% of households receive remittances
• Population is approximately 2.2 million, although no census conducted since 1981
• 92% Ethnic Albanian, 5.3% Serbian, 2.7 Other Minorities.
![Page 5: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/5.jpg)
2. Data Description
![Page 6: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/6.jpg)
Data DescriptionHousehold Budget Survey and Migration Survey of
2009◦Stratified by Regions and Urban/Rural Areas, Ethnic
composition
Migration drawn from same master frame as HBS and has 60% overlap (1,717 Households)
HBS took place over 12 months
Migration Survey conducted over 3 months period (April, May, June), based on recall of past 12 months
![Page 7: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/7.jpg)
Welfare and Poverty Indicators
Main welfare indicator is consumption per household (Does not include own consumption)
Poverty measure is based on cost to meet basic needs per adult equivalent, which in 2002 prices is set at 43 Euros per month
Headcount Poverty Rate (Share of Households bellow poverty line corresponding to their size and composition)
![Page 8: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/8.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 9: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/9.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 10: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/10.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 11: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/11.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 12: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/12.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 13: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/13.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 14: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/14.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 15: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/15.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 16: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/16.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 17: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/17.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 18: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/18.jpg)
Descriptive Statistics by Presence of Migrants and Remittances
![Page 19: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/19.jpg)
3. Methodology
![Page 20: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/20.jpg)
Welfare Effect of Migration and Remittances
◦a) Consumption Effect of 1) Remittances2) Migration
◦b) Poverty Effect of:1) Remittances2) Migration
◦c) Inequality Effect of Remittances
![Page 21: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/21.jpg)
Welfare Effect of Migration and Remittances – Methodology Motivation
◦ Analyze effect of Migration and Remittances separately Migrant and remittances recipient households not overlapping groups
Migrant relations may affect welfare through means other than remittances – business connection, knowhow, etc.
◦ But…
![Page 22: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/22.jpg)
Welfare Effect of Migration and Remittances – Methodology Motivation
◦ Analyze effect of Migration and Remittances separately Migrant and remittances recipient households not overlapping groups
Migrant relations may affect welfare through means other than remittances – business connection, knowhow, etc.
◦ Migrant households may be selected non-randomly from the population
![Page 23: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/23.jpg)
Welfare Effect of Migration and Remittances – Methodology Motivation
◦ Analyze effect of Migration and Remittances separately Migrant and remittances recipient households not overlapping groups
Migrant relations may affect welfare through means other than remittances – business connection, knowhow, etc.
◦ Migrant households may be selected non-randomly from the population
◦ Remittances recipient households maybe selected non-randomly from migrant households
![Page 24: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/24.jpg)
Welfare Effect of Migration and Remittances – Methodology Motivation
◦ Analyze effect of Migration and Remittances separately Migrant and remittances recipient households not overlapping groups
Migrant relations may affect welfare through means other than remittances – business connection, knowhow, etc.
◦ Migrant households may be selected non-randomly from the population
◦ Remittances recipient households maybe selected non-randomly from migrant households
◦ If we do not correct for selection, estimates for the effect of remittances and migration will be biased.
![Page 25: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/25.jpg)
Welfare Effect of Migration and Remittances – methodology motivation
◦ Analyze effect of Migration and Remittances separately Migrant and remittances recipient households not overlapping groups
Migrant relations may affect welfare through means other than remittances – business connection, knowhow, etc.
◦ Migrant households may be selected non-randomly from the population
◦ Remittances recipient households maybe selected non-randomly from migrant households
◦ If we do not correct for selection, estimates for the effect of remittances and migration will be biased.
Estimate Treatment Effect Model to control for selection Bivariate Probit
![Page 26: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/26.jpg)
a. Consumption
![Page 27: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/27.jpg)
Impact of REMITTANCES On Consumption Per Capita
C – Log Consumption Per Capita
T* - Latent Variable that measures propensity to receive REMITTANCES
1) Two Stage Treatment Effect Model
2) Full Information Maximum Likelihood
![Page 28: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/28.jpg)
Impact of MIGRATION On Consumption Per Capita
C – Log Consumption Per Capita
M* - Latent Variable that measures propensity to Have MIGRANT Relations
1) Two Stage Treatment Effect Model
2) Full Information Maximum Likelihood
![Page 29: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/29.jpg)
b. Poverty
![Page 30: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/30.jpg)
Poverty Impact of Migration and Remittances
Remittances:
P* - Latent Variable measuring propensity to be Poor
Bivariate Probit
Migration:
![Page 31: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/31.jpg)
Exclusion Restriction
◦Share of households in the Strata that have migrant relationship in 2005 (lagged migration network)
Migrant networks lower the costs of migration◦ Providing information on job opportunities outside Kosovo
◦ Ensure the smooth transition to the migration destination.
◦ Supply credit
◦ Cover reallocation expenses
![Page 32: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/32.jpg)
Exclusion Restriction - Caveat
We assume lagged migrant network affect consumption only through increased likelihood of having migrants and receiving remittances
Migrant networks may affect local infrastructure, raise capital stock, etc
This may improve welfare of households with and without remittances
This would lead to downward bias on our estimate of affect of remittances on welfare
![Page 33: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/33.jpg)
c. Inequality
![Page 34: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/34.jpg)
Effect of Remittances on Inequality
Inequality Measure is Variance of Log Consumption Per Capita
Use variance decomposition methodology developed by Fields (2004), extended by Silber, Hanchane and Dumas (2010)
Divide households into groups that receive and do not receive transfers
Between Group variance
Within Group Variance
![Page 35: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/35.jpg)
Effect of Remittances on InequalityContribution to Contribution to
Between Group Within Group Variance Variance
Explanatory Variables
-------Mills ratio------
--------Residual-------
Transfers------
![Page 36: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/36.jpg)
4. Empirical Results
![Page 37: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/37.jpg)
a. Consumption
![Page 38: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/38.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 39: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/39.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 40: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/40.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 41: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/41.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 42: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/42.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 43: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/43.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 44: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/44.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 45: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/45.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 46: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/46.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 47: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/47.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 48: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/48.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 49: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/49.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 50: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/50.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 51: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/51.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 52: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/52.jpg)
Consumption Effect of Remittances and Migration (FIML)
![Page 53: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/53.jpg)
Consumption Effect of Remittances and Migration (Two Step)
![Page 54: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/54.jpg)
Consumption Effect of Remittances and Migration (Two Step)
![Page 55: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/55.jpg)
Consumption Effect of Remittances and Migration (Two Step)
![Page 56: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/56.jpg)
b. Poverty
![Page 57: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/57.jpg)
Poverty Effect of Remittances and Migration
![Page 58: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/58.jpg)
Poverty Effect of Remittances and Migration
![Page 59: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/59.jpg)
Poverty Effect of Remittances and Migration
![Page 60: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/60.jpg)
Poverty Effect of Remittances and Migration
![Page 61: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/61.jpg)
Poverty Effect of Remittances and Migration
![Page 62: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/62.jpg)
Poverty Effect of Remittances and Migration
![Page 63: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/63.jpg)
Poverty Effect of Remittances and Migration
![Page 64: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/64.jpg)
Poverty Effect of Remittances and Migration
![Page 65: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/65.jpg)
Poverty Effect of Remittances and Migration
![Page 66: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/66.jpg)
Poverty Effect of Remittances and Migration
![Page 67: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/67.jpg)
Poverty Effect of Remittances and Migration
![Page 68: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/68.jpg)
Poverty Effect of Remittances and Migration
![Page 69: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/69.jpg)
Poverty Effect of Remittances and Migration
![Page 70: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/70.jpg)
c. Inequality
![Page 71: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/71.jpg)
Decomposition of Overall Consumption Variance
(Groups Receiving and Not Receiving Transfers)
![Page 72: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/72.jpg)
Decomposition of Overall Consumption Variance
(Groups Receiving and Not Receiving Transfers)
![Page 73: Welfare Effect of Foreign Migration and Remittances in Kosovo Sachiko Miyata, World Bank Irina Shaorshadze, Cambridge University.](https://reader030.fdocuments.us/reader030/viewer/2022032703/56649f505503460f94c73468/html5/thumbnails/73.jpg)
Contribution of Variables to Between and Within Group Variance
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Contribution of Variables to Between and Within Group Variance
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Contribution of Variables to Between and Within Group Variance
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5. Conclusions and Policy Implications
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Conclusions◦ Remittances are important deprivation-coping mechanism
for vulnerable population.
◦ There is selection into migration by households with genuinely low welfare and human capital endowment.
◦ Among households with migrants, there is no evidence that transfers are targeting households of lower welfare.
◦ Remittances do not have significant effect on aggregate inequality.
◦ Aggregate inequality is driven primarily by unobserved heterogeneity.
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Policy Implications◦ Any drastic reduction in current migrant flows has potential
to increase poverty rate
◦ Public poverty reduction schemes have to take into account that households with lower welfare select into receiving remittances
◦ If Public transfers crowd out Private transfers, the former may have limited effect
◦ Need to gradually transition out of high dependence on remittances
◦ In medium term, need to harness remittances by encouraging their use for investment rather than consumption
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Thank You