Fostering Sustainable Rural Development: the Role of Women’s Empowerment in Economic Decoupling in Kosovo

Abstract As economies pursue sustainable development, reducing dependence on external financial support is especially critical in rural contexts where structural vulnerabilities persist. In Kosovo, rural households often rely on remittances, masking deeper limitations in local economic capacity. This study examines whether women’s empowerment can strengthen household economic resilience and reduce remittance dependency, therefore contributing to more self-sustaining rural development. Using a modified version of the Women’s Empowerment in Agriculture Index (WEAI), adapted for data constraints, the analysis captures empowerment across all rural households, regardless of their primary economic activity. The analysis relies on a reduced-form Ordinary Least Squares (OLS) regression model to estimate the relationship between women’s empowerment and household economic performance, measured as household income excluding remittances, aggregated, and per household member. We utilize data from the 2018 MCC Kosovo Labor Force and Time Use Survey to explore this relationship in Kosovo. This dataset provides insights into household income, asset ownership, labor participation, household decision-making, and time allocation across various demographic groups. Analyzing income without remittances provides a view of household financial resilience, demonstrating empowerment’s role in enhancing local economic capacity while contextualizing the current reliance on external income sources. Results show that households with an empowered principal woman have significantly higher local income, particularly income excluding remittances, compared to households with less empowered women. These findings highlight the potential of empowerment to foster rural economic resilience by improving internal income-generating capacity. While the findings offer valuable insights, future research would benefit from longitudinal data and advanced causal techniques to further deepen our understanding of the dynamic relationship between empowerment and household income. This research underlines the need for policies that strengthen women’s decision-making power, access to resources, and economic inclusion within rural areas. Policymakers are encouraged to adopt gender-focused strategies that elevate women’s roles in rural economies, positioning empowerment as a catalyst for sustainable development across Kosovo.