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War Legacies, Welfare and Livelihoods in Rural Areas: The Case of Kosovo


  • Elodie Douarin,

  • Julie Litchfield,

  • Rachel Sabates-Wheeler

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    • Elodie Douarin is a Research Fellow with the Department of Economics, School of Business, Management and Economics at the University of Sussex, Brighton BN1 9RF, UK. E-mail: for correspondence. Julie Litchfield is a Senior Lecturer with the Department of Economics, School of Business, Management and Economics at the University of Sussex. Rachel Sabates-Wheeler is a Research Fellow and Director of the Centre for Social Protection, Institute of Development Studies, Brighton, UK. This paper was written as part of the EU-FP6 funded project MICROCON ( Data were collected by the Statistical Office of Kosovo and distributed by the World Bank LSMS office. The authors would like to thank participants of two seminars given at the University of Sussex and IDS for useful comments on a previous version of the paper. The helpful comments of three anonymous reviewers and the Editor-in-Chief of this journal are also gratefully acknowledged.


This article examines the effects of war on livelihood choices and welfare outcomes of rural households in Kosovo using the 2000 Kosovo Living Standards Measurement Survey. We analyse the extent of the legacy of war on livelihood activities and welfare. We first identify livelihood portfolio clusters of households pursuing similar combinations of activities. These clusters are comparable to those described in more qualitative studies in the immediate post-conflict period. We then examine the determinants of livelihood portfolio choice and the consequences of these for welfare outcomes. Our results provide evidence of a relationship between a household’s experience of war and livelihood choice. We also identify significant selection effects on welfare for three out of four livelihood clusters, highlighting the fact that selecting into a specific livelihood portfolio changes welfare relative to expected levels. Our results show that war not only affects livelihood choices but also changes the returns to these activities.