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How Do Migration and Remittances Affect Inequality? A Case Study of Mexico

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  • Zsoka Koczan
  • Franz Loyola

Abstract

The poverty-reducing effects of remittances have been well-documented, however, their effects on inequality are less clear. This paper examines the impact of remittances on inequality in Mexico using household-level information on the receiving side. It hopes to speak to their insurance role by examining how remittances are affected by domestic and external crises: the 1994 Mexican Peso crisis and the Global Financial Crisis. We find that remittances lower inequality, and that they become more pro-poor over time as migration opportunities become more widespread. This also strengthens their insurance effects, mitigating some of the negative impact of shocks on the poorest.

Suggested Citation

  • Zsoka Koczan & Franz Loyola, 2018. "How Do Migration and Remittances Affect Inequality? A Case Study of Mexico," IMF Working Papers 2018/136, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/136
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    Cited by:

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    2. Selçuk Akçay, 2022. "Remittances and income inequality in the Philippines," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(1), pages 30-47, May.
    3. Richard Disney & Andy McKay & C Rashaad Shabab, 2023. "Household inequality and remittances in rural Thailand: a life-cycle perspective," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 418-443.
    4. Joel OUDINET, 2021. "Introduction - L’impact de la migration sur le développement inclusif," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 53, pages 5-21.
    5. Björn Nilsson & Racha Ramadan, 2020. "Migration and Inequalities Around the Mediterranean Sea," Working Papers 1390, Economic Research Forum, revised 20 Apr 2020.
    6. Disney, Richard & Mckay, Andy & Shabab, C Rashaad, 2023. "Household inequality and remittances in rural Thailand: a life-cycle perspective," LSE Research Online Documents on Economics 121207, London School of Economics and Political Science, LSE Library.
    7. Hackl, Andreas, 2018. "Mobility equity in a globalized world: Reducing inequalities in the sustainable development agenda," World Development, Elsevier, vol. 112(C), pages 150-162.
    8. Joel Oudinet, 2021. "L’impact de la migration sur le développement inclusif," Post-Print hal-04065384, HAL.

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