| Study ID | 01 |
| Study title | To Consume or to Self-Employ?: Evidence from Remittances’ Use in Macedonia, Bosnia and Herzegovina and Kosovo, with Emphasis on Crisis, Gender and Ethnicity Role |
| Study language | English |
| Institution(s) | University
American College Skopje, Treta makedonska brigada br.60, 1000 Skopje,
Macedonia (a) CEDAR – Center for Economic Development and Research, Bolnicka 23, 71000 Sarajevo, Bosnia and Herzegovina (b) |
| Authors | Marjan Petreski (PI) Branimir Jovanovic Despina Tumanoska Senada Smajic Lejla Kamenijas Sokol Havolli Arben Mustafa Nermin Oruč |
| Disciplines | Economics |
| Period | Macedonia: 2008, 2012 Bosnia and Herzegovina: 2007, 2011 Kosovo: 2007, 2009, 2011 |
| Geographical space | Macedonia, Bosnia and Herzegovina, Kosovo |
| Abstract | The objective of this study was to investigate the developmental effects of remittances on poverty, inequality and self-employment in three Balkan countries: Macedonia, Kosovo and Bosnia-Herzegovina, and to put them in the light of three pertinent issues therein: ethnicity, the urban-rural divide and the gender of the household head. To that end, two waves of micro-surveys have been used in each country – one before and another during the ongoing crisis to check if the latter has changed the patterns through which remittances potentially affect the development in those countries. First, results suggest a positive role of remittances for poverty in Macedonia and Kosovo, but not in Bosnia. Second, results for Macedonia and Kosovo suggest that remittances have been slightly increasing inequality before the crisis, while during it, they have been reducing inequality. Opposite findings are obtained for Bosnia-Herzegovina. Third, remittances in Macedonia were found to play a positive role for the decision to establish an own business, but the effect is small, so that it becomes meaningful only for households who receive the highest amounts of remittances. In Kosovo, remittances were overall found not to be relevant for the decision one to self-employ himself. Further contrary to the two cases, remittances in Bosnia-Herzegovina were found to reduce one’s probability to selfemploy. Important policy recommendations emerge from this analysis. Firstly, given the size of the remittances in the three countries and their significance for the consumption of households, authorities should develop an alternative shielding remittance-receiving households will be thrown into destitute poverty; social safety nets may be activated, but this may exercise a significant burden on the state budget. Therefore, governments should be prepared to take an alternative action for such households, including one-off state aid, in-kind contributions and the like. Second, such a scenario, in addition, will make the current account more vulnerable and raise the question of its financing. If foreign investment are not viable, then dwelling on foreign loans or spending the official reserves may jeopardize macroeconomic stability. Hence, policymakers should seek for sources of stable finances, especially the foreign direct investment to meet an unexpected reduction in remittances. Third, authorities may think of framing a government policy for channeling as much as possible of those money into productive investment in small firms and farms. The policy may involve direct subsidies for those who invest remitted money, reduction or elimination of the social security contributions, especially for young people opening up a firm with remitted money, subsidized loans through the state development banks and the like. |
| Results | First, results suggest a positive role of remittances for poverty in Macedonia and Kosovo, but not in Bosnia. Namely, remittance-receiving household are found to be less probable to fall into poverty than compared to non-remittance-receiving ones in these two countries. It is likely that in Macedonia, the poverty-reduction effect of remittances is meaningful for Macedonians and not for Albanians. On the contrary, for Kosovar households, only the gender divide is important for the poverty effect of remittances: male-headed households are found to be impacted more positively by remittances than female-headed ones. With regard to crisis, in Macedonia and Kosovo, but not in Bosnia-Herzegovina, remittances were found less beneficial for reducing the probability of household being poor during the crisis than compared to before the crisis. Second, results for Macedonia and Kosovo suggest that remittances have been slightly increasing inequality before the crisis, while during it, they have been reducing inequality. Opposite findings are obtained for Bosnia-Herzegovina. Third, results suggest that remittances in Macedonia play a positive role for the decision to establish an own business, but the effect is small, so that it becomes meaningful only for households who receive the highest amounts of remittances. In Kosovo, remittances were overall found not to be relevant for the decision one to self-employ himself. Further contrary to the two cases, remittances in Bosnia-Herzegovina were found to reduce one’s probability to self-employ. |
| Method description | Regression method has been applied to survey data. |
| Publications | Petreski, Marjan; Jovanovic, Branimir. 2016. Do Remittances Reduce Poverty and Inequality in the Western Balkans? Evidence from Macedonia?. In: Dahinden, J., Efendic, A. and Zbinden, M. (eds.) Diversity of Migration in South East Europe. Fribourg, RRPP Joint Volume, p.85-109. Petreski, Marjan; Jovanovic, Branimir. 2013. Remittances and Development in the Western Balkans: The cases of Macedonia, Kosovo and Bosnia-Herzegovina. Scholars’ Press. |
| Secondary analyses | Yes. |
| Study type | Mandated research |
| Financed by | Mandating institution |
| Mandating institution(s) | University of Fribourg, Interfaculty Institute for Central and Eastern Europe, Regional Research Promotion Programme in the Western Balkans – RRPP, Bd de Pérolles 90, 1700 Fribourg |
| Progress | Finished |
| Start – end date | 01.06.2012 – 31.07.2013 |
| Data type | Quantitative data |
| Media | Digitalized data file |
| Available document types | Collection instruments Codebook Publications (final report, articles) |
| Linked to | Dataset 01 – To Consume or to Self-Employ? |
| Remarks | Excel data file |
| Analysis unit | Individual |
| Mode of data collection | Face-to-face interview (CAPI, CAMI, PAPI, etc.) |
| Data collection instruments | Questionnaire |
| Number of cases | 1000 |
| Sampling description | Random stratified sampling. |
| Available versions | 1.0 |
| Bibliographical citation | Marjan Petreski, Branimir Jovanovic, Despina Tumanoska, Senada Smajic, Lejla Kamenijas, Sokol Havolli, Arben Mustafa, Nermin Oruč: To Consume or to Self-Employ?: Evidence from Remittances’ Use in Macedonia, Bosnia and Herzegovina and Kosovo, with Emphasis on Crisis, Gender and Ethnicity Role, 2012 [Dataset]. University American College Skopje, CEDAR – Center for Economic Development and Research. Distributed by DASS-BiH, Sarajevo. |
| Access category | Restricted |
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