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Abstract

This paper explores the determinants of internal migration in Albania, applying a neoclassical migration theory. A gross migration function and a propensity to migrate function are estimated using aggregate wage and unemployment differentials. The data source for the empirical investigation is the “Living Standard Measurement Survey for Albania” (2002). Controlling for personal characteristics and district-level effects, unemployment and wage rates for each of the 36 districts in Albania were computed: the relevant differentials were used to test the neoclassical migration function. The results confirm the existence of a relationship between migration and wages at origins and destinations, while an effect of unemployment differentials on migration was not found. Moreover, the estimated coefficients of the individual variables in the earning function give support to the human capital prediction that migration is undertaken to maximize the personal earning potential.

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