Ethnicity and remittances: Evidence from Kosovo.

Summary The purpose of this paper is to investigate the role played by ethnicity on the determinants and welfare implications of transfers from abroad in Kosovo. This territory, in which the tension among ethnic groups is still the focus of international concern, is one of the primary recipients of remittances in the world. Using data collected in 2011 from 8000 households residing in Kosovo and 650 of their members living abroad, we focus on differences in the remittance behaviors of Serbs and Albanians who were involved in a civil war in the 1990s. Our results show that the probability of receiving money is much higher for the Albanians compared to the Serbs, which is related to differences in migration models between both ethnic groups. Remittances lead to a significant increase in the average level of per capita consumption for all ethnic groups even after accounting for endogeneity of the transfer variable.