Migration, remittances and well-being in Kosovo

Millions of people worldwide choose migration as a livelihood strategy, with the households and communities staying behind relying heavily on remittance infows. The question of whether migration is benefcial to the households and individuals staying behind is an important one, because the efects may occur in diferent spheres and over time and they may not always be straightforward. This calls for a detailed examination of how migration afects the well-being of households and individuals staying behind in migrant-sending communities. Accordingly, this thesis evaluates the efects of participation in international migration and remittances on the well-being of households and individuals in migrant-sending communities in Kosovo. Adopting a pluralistic conceptualization of well-being and utilizing a mix of quantitative and qualitative methods of investigation, it advances the current global migration debate on the efects of migration on the development processes in low- and middle-income economies. First, the dynamic efects of migration and remittances on households' poverty and income distribution are estimated. Based on a nationally representative dataset and using state-of-the-art matching techniques, we measure impacts based on counterfactual scenarios, and, for the frst time, take a step forward by applying a dose-response function approach to assess poverty efects due to variations in the time-length of receiving remittances. Our fndings show that remittances alleviate both absolute and relative poverty levels and lead to marginal increases in inequality for the case of Kosovo. We further demonstrate that - although poverty reduction efects are stronger in the short-run - remittances have a positive poverty reduction efect over time. The efects of migration and remittances on households' expenditure behavior are further assessed. The empirical results indicate that participation in migration reduces households' budget share for household food consumption with no immediate impact on households' budgetary allocations for business investments, health, and education expenditures. Our interpretation of such fndings is that participation in migration does not cause substantive changes on the spending behavior of households with migrant family members, while remittances are predominantly used to cover basic consumption needs. Second, participation in migration and remitting patterns are linked to broader and sometimes contradicting outcomes of well-being. Utilizing a case study research approach, we provide an in-depth analysis of these complex interlinkages between migration, remittances, and the well-being of migrant-sending communities. While we illustrate how remittances often protect families from poverty, there are negative outcomes as well. Social comparisons to migrants infuence the migration aspirations and the subjective well-being of individuals in the village communities. Together with the delineation of a minimum remittance income, it turns into a barrier for participation in the local labor markets. In particular, women's disengagement from work leads to increased vulnerability and economic dependency with negative implications for their empowerment and well-being. Our research contributes to the most recent migration research in three main aspects. First, the study applies novel econometric techniques to estimate dynamic welfare efects of migration. Given the scarcity of panel data in our feld of study, the approach opens a new methodological venue for future impact assessments in the absence of longitudinal data. Second, the analysis of the broader well-being outcomes of migration shows how the current migration and development agenda should be redefned to recognize improvements in well-being as a dynamic process that includes not only material welfare, but also aspects such as happiness, independence, empowerment and more. Third, our empirical fndings contribute to closing an empirical gap in research by highlighting migration and remittance efects in the highly remittance-dependent, but under-researched European and Central Asian transition economies.