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The impact of emigration on source country wages : evidence from the Republic of Moldova

Author

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  • Bouton, Lawrence
  • Paul, Saumik
  • Tiongson, Erwin R.

Abstract

Thousands of Moldovans emigrated for work abroad over the last few years following nearly a decade of economic stagnation in their home country. At about 30 percent of the labor force, Moldova's emigrant population is in relative terms among the largest in the world. This study uses a unique household survey to examine the impact of emigration on wages in Moldova. The authors find a positive and significant impact of emigration on wages and the result is robust to the use of alternative samples and specifications. The size of the emigration coefficient varies depending on the sample and model specification, but the baseline result suggests that, on average, a 10 percent increase in the emigration rate is associated with 3.2 percent increase in wages. At the same time, there is evidence of significant differences across economic sectors in the estimated effect of emigration on wages. The authors speculate and provide some evidence that offsetting changes in labor demand, as revealed by information on employment growth by sector, may help explain some of the heterogeneity.

Suggested Citation

  • Bouton, Lawrence & Paul, Saumik & Tiongson, Erwin R., 2011. "The impact of emigration on source country wages : evidence from the Republic of Moldova," Policy Research Working Paper Series 5764, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5764
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    Cited by:

    1. Horie, Norio & Iwasaki, Ichiro & 岩﨑, 一郎, 2022. "Returns to Education in European Emerging Markets: A Meta-Analytic Review," RRC Working Paper Series 95, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    2. Lim, Sokchea, 2021. "Policy to promote overseas migrant work: A macro-dynamic framework," Mathematical Social Sciences, Elsevier, vol. 109(C), pages 113-125.
    3. De Paoli, Anna & Mendola, Mariapia, 2014. "International Labor Mobility and Child Work in Developing Countries," IZA Discussion Papers 8066, Institute of Labor Economics (IZA).
    4. Tamar Khitarishvili, 2016. "Gender Dimensions of Inequality in the Countries of Central Asia, South Caucasus, and Western CIS," Economics Working Paper Archive wp_858, Levy Economics Institute.
    5. Prachi Mishra & Antonio Spilimbergo, 2011. "Exchange Rates and Wages in an Integrated World," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(4), pages 53-84, October.
    6. Saumik Paul & Yoko Oishi, 2018. "A Primer on the Drivers of Labor Income Share," Working Papers id:12948, eSocialSciences.
    7. Anna De Paoli & Mariapia Mendola, 2017. "International Migration and Child labour in Developing Countries," The World Economy, Wiley Blackwell, vol. 40(4), pages 678-702, April.
    8. Lim, Sokchea & Mahbub Morshed, A.K.M., 2017. "Fiscal policy in a small open economy with cross-border labor mobility," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 147-174.
    9. Amalia Cristescu & Maria Denisa Vasilescu & Larisa Stanila & Madalina Ecaterina Popescu, 2013. "Regional Analysis Of The Real Earnings In Romania," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(2), pages 58-78, DECEMBER.
    10. Ouyang, Alice Y. & Paul, Saumik, 2018. "The effect of skilled emigration on real exchange rates through the wage channel," Journal of International Money and Finance, Elsevier, vol. 89(C), pages 139-153.
    11. Benjamin Elsner, 2013. "Does emigration benefit the stayers? Evidence from EU enlargement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 531-553, April.
    12. Anzelika Zaiceva, 2014. "Post-enlargement emigration and new EU members' labor markets," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-40, August.
    13. Gagnon, Jason, 2010. "“Stay with Us”? The Impact of Emigration on Wages in Honduras," Proceedings of the German Development Economics Conference, Hannover 2010 57, Verein für Socialpolitik, Research Committee Development Economics.
    14. World Bank, "undated". "Europe and Central Asia Economic Update, October 2017," World Bank Publications - Reports 28534, The World Bank Group.

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    Keywords

    Labor Markets; Labor Policies; Population Policies; Voluntary and Involuntary Resettlement; Human Migrations&Resettlements;
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