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Remittances and inequality: a dynamic migration model

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  • I-Ling Shen
  • Frédéric Docquier
  • Hillel Rapoport

Abstract

We develop a model to study the effects of migration and remittances on inequality in the origin communities. While wealth inequality is shown to be monotonically reduced along the time-span, the short-and the long-run impacts on income inequality may be of opposite signs, suggesting that the dynamic relationship between migration/remittances and inequality may well be characterized by an inverse U-shaped pattern. This is consistent with the findings of the empirical literature, yet offers a different interpretation from the usually assumed migration network effects. With no need to endogenize migration costs through the role of migration networks, we generate the same result via intergenerational wealth accumulation
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Suggested Citation

  • I-Ling Shen & Frédéric Docquier & Hillel Rapoport, 2010. "Remittances and inequality: a dynamic migration model," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(2), pages 197-220, June.
    • Handle: RePEc:kap:jecinq:v:8:y:2010:i:2:p:197-220
    DOI: 10.1007/s10888-009-9110-y
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    More about this item

    Keywords

    Inequality; Migration; Remittances;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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