Welcome Home in a Crisis: Effects of Return Migration on the Non-migrants' Wages and Employment

Abstract:

Albanian migrants in Greece were particularly affected by the Greek crisis, which spurred a wave of return migration that increased Albania’s labor force by 5% between 2011 and 2014 alone. We study how this return migration affected the employment chances and earnings of Albanians who never migrated. We find positive effects on the wages of low-skilled non-migrants and overall positive effects on employment. The gains partially offset the sharp drop in remittances in the observed period. The employment gains are concentrated in the agricultural sector, where most return migrants engage in self-employment and entrepreneurship. Businesses run by return migrants seem to pull Albanians from non-participation, self-employment and subsistence agriculture into commercial agriculture.

CID Working Paper: 330
Keywords: Return migration; wages and employment of non-migrants
JEL codes: J21, J23, J24, J31, J61