Taking advantage of new data on a high migration country, the main goal of this paper is to investigate the impact of migration on resource allocation to, and income from, agricultural production of farm households. The main channels through which these impacts can be expected to materialize are via the allocation of labor and capital resources of the households, as modified by the loss of "resident" family workforce to migration and the gain in access to working capital or credit made possible by the inflow of remittances or simply by an improved economic and financial status of the household associated with migration. Our results suggest that migration of one or more household members is being used by rural households in Albania as part of a strategy to move out of agriculture. The impact of family labor is unequivocal: members of households with migrants abroad work significantly fewer hours in agricultural production, both in total and on a per capita basis. Also, women in migrant households work proportionately more than men, when compared with their counterparts in non-migrant households. Contrary to expectation, and despite sizable remittances, migrant households do not appear to invest more in productivity-enhancing and time-saving farm technologies in crop production such as chemical fertilizers and farm equipment. Despite the reduced labor effort, however, agriculture income does not seem to decline as a result of migration, and total income (as expected) increases significantly. Although a relative decline of agriculture is an inevitable part of the development process, a stagnating agriculture ought to be a matter of concern to policy makers, given the number of Albanian households still relying on farming as main source of income, and the pervasive lack of non-farm income opportunities for rural households. Also, the lack of productivity growth and investment in agriculture that the evidence presented in this paper seems to be hinting to, can be interpreted as signals of a foregone opportunity particularly in areas of the country with higher farming potential.


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