The macroeconomic implications of emigrants’ remittances in Romania, Bulgaria and Albania

Abstract

The process of transition in the Balkan economies was accompanied by large-scale emigration. The employment of a considerable part of their labour force abroad was accompanied by a massive inflow of remittances. Remittances are considered the basic gain of migration for the emigration countries and their main compensation for losing (temporarily or more permanently) a part of their labour force. Whether remittances contribute to the economic development of the country receiving them depends on how they are used, that is, what activities they finance. Their exclusive use for consumption and imports, for example, is considered less development-stimulating than financing productive investment. This article investigates the impact of remittances on three basic macroeconomic variables, namely consumption, investment and imports, for three transition Balkan economies: Romania, Bulgaria and Albania. The main new element of the analysis is the use of econometric investigation on the basis of time series analysis, since emigration from these countries only started less than 20 years ago.

Remittances and Energy Consumption: Evidence from Morocco

“…Clément () estimated that remittance flows boost consumption expenditures by 1.7 per cent in Tajikistan. Blouchoutzi and Nikas () observed that international remittances are a determining factor for household consumption expenditures in Romania, Bulgaria and Albania.…”

“…Macro and micro level empirical studies (country case studies using household surveys), supporting the optimistic view, reveal that remittances reduce income inequality, (Mughal, ), poverty (Jimenez‐Soto and Brown, ), infant mortality (Zhunio et al., ), child labour (Ebeke, ), malnutrition (Lu, ), and output volatility (Chama et al., ). Additionally, they promote economic growth (Cooray, ), financial sector development (Aggarwal, et al., ), and capital accumulation (Senbeta, ); increase the propensity to save (Ziesemer, ), aggregate labour supply (Posso, ), domestic investment (Blouchoutzi and Nikas, ), tax revenues (Abdih et al., ), and life expectancy (Zhunio et al., ); improve primary and secondary school attendance (Zhunio et al., ); and maintain macroeconomic stability (Spatafora, ).…”

Analysis of Employment in EU According to Europe 2020 Strategy Targets

“…Remittances are considered as compensation for emigration, which causes a decrease in the human capital in countries of origin of migrants, but also they can decrease labor supply and increase the income inequality. Blouchoutzi and Nikas (2010) analyzed the effects of remittances in the economies of Albania, Bulgaria, and Romania. The usage of remittances was mainly in the construction, purchase of the capital goods, transport, and financial services.…”

Immigration as a form of contemporary threats to countries of the European Union

“…Значај новчаних дознака из иностранства може се уочити на примеру три бал-канске земље, где је за период 1992-2008. година примећено да се укупни годи-шњи износ новчаних дознака повећава у складу са процентом БДП -5,5% у Руму-нији, 8,6% у Бугарској и 27% у Албанији, где се проценат подудара и са повећањем стопе индустријске производње [8].…”

“…Пре-ма извештају Међународне организације рада, 8 који је усвојен у јуну 2012. године, током претходне деценије укупно је око 20 милиона људи емигрирало, од којих су једна четвртина деца [12]. Подаци из Европске комисије говоре да је само у перио-ду 2010-2012. године у Европи забележено 30.146 жртава трговине људима, иако је стварни број сигурно много већи [13].…”