According to INSTAT data, private sector employment increased by only 23,000 between 2001 and 2004, adding only 2.5% to total employment in this period (WB, 2006). Two main implications of this situation are the migration of a lot of young men to work abroad and the large withdrawals of women from the labor market<sup>9</sup> . The consequential under-valuation of women’s time has resulted in significant differences in the time male and female groups allocate to paid and unpaid work (with women spending an inefficiently high proportion of their time in household production and caring activities, while men overspecialize in labor market activities) (Paci, 2002). While female represent at least half of the population in Albania, they account for the 40 percent of the total labor force and face higher rates of unemployment than men (especially the young) (ILO, 2001).<sup>10</sup> Driven by economic hardships and geographic proximity, Albania has developed strong migration ties with other labor markets, in particular Greece and Italy, and remittances play a significant role in Albanian economy (Coulon and Piracha, 2005; Carletto et al. 2007). Much of migration from Albania shows a stable and common pattern in that it has traditionally been temporary in nature (particularly the flow to neighboring Greece), whether seasonal or circular. The limited empirical evidence available seems to suggest the existence of a “migration cycle”, involving multiple migration episodes prior to settling, very often back in the source country (Labrianidis and Hatziprokopiou, 2006).

Overall, the high incidence of the informal sector, the intensity of migration flows, the high rate of hidden unemployment in agriculture sector and the significant number of unemployed that are not registered in the public employment service, makes difficult to have a real evaluation of the labor market situation of the country over the last 17 years (see ILO Report 2001). Using detailed micro-data collected through household questionnaires, we provide new empirical evidence on the impact of international migration on the local male and female labor supply in Albania. If engagement in earning activities is the result of all economic policies and social processes, it is of interest to empirically investigate the impact of massive male-dominated migration on female employment status in both formal and informal sector in Albania.

# **3. Data and descriptive analysis**

The analysis in this paper is based on the 2005 Albania Living Standards Measurement Study (LSMS) survey carried out by the Albania Institute of Statistics (INSTAT) with technical assistance from the World Bank. Unlike other household surveys, the latter provides unusually detailed information on migration of both current and former household members from Albania to foreign countries. Moreover, Albania LSMS includes information on individual labor market status along with a wide range of demographic and socio-economic characteristics at household and individual level.

> 9 For an in-depth analysis of the mass Albanian migration since 1990, see King, et al. (2005).

> 10 Between 1980 and 2004, female labor force participation in Albania has not increased much (from 39% to 42%) (see WB GenderStats at http://devdata.worldbank.org/genderstats). This rather stable trend challenges the argument that female labor supply in migrant households may be explained by the aggregate national shift toward more working women in the economy.

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