Remittances and Inequality: A Dynamic Migration Model

Arbeitspapier

We develop a model of the interdependencies between migration, remittances and inequality, and investigate how migration and subsequent remittances affect inter-household inequality in the origin communities. An important feature of our model is that we take into account the impact of migration on the local (rural) labor market. Migration is shown to decrease wealth inequality but may generate higher income inequality. Moreover, the short-run and long-run impacts of migration on income inequality may also be of opposite signs, suggesting that the dynamic relationship between migration and inequality may well be characterized by an inverse U-shaped pattern. This is consistent with the findings of the empirical literature on remittances and inequality, but offers a different interpretation, with no need to endogenize migration costs through the role of migrant networks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 808

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Geographic Labor Mobility; Immigrant Workers ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Macroeconomic Analyses of Economic Development
• Subject: migration ; remittances ; inequality ; Gastarbeiterüberweisung ; Einkommensverteilung ; Haushaltsökonomik ; Migrationstheorie ; Dualökonomie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Docquier, Frédéric ; Rapoport, Hillel
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20053
• Last update: 10.03.2025, 11:43 AM CET