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International Remittances And Income Inequality In Africa

Author

Listed:
  • John C. ANYANWU

    (Development Research Department, African Development Bank, Temporary Relocation Agency, Tunis, Tunisia)

Abstract

This paper investigates the impact of migrant remittances on income inequality in African countries, using a panel of five eight-year non-overlapping windows for the period 1960-2006. The results suggest that, first, international migrant remittances have a significant positive impact on income inequality in African countries. After instrumenting for the possible endogeneity of remittances, a 10 percent increase in remittances as a percentage of GDP will lead, on average, to a 0.013 percent increase in income inequality in Africa. Second, initial per capita GDP strongly increases income inequality. Third, inflation rate appears to be the strongest factor fueling income inequality in the Continent. Fourth, education significantly reduces income inequality. Fifth, the North African dummy and remittances inflows to North Africa largely reduce income inequality in the sub-region while doing the opposite in Sub-Saharan Africa. The policy implications of these results are discussed.

Suggested Citation

  • John C. ANYANWU, 2011. "International Remittances And Income Inequality In Africa," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 7, pages 117-148, May.
    • Handle: RePEc:aic:revebs:y:2011:i:7:anyanwuj
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    References listed on IDEAS

    as
    1. Acosta, Pablo & Fajnzylber, Pablo & Lopez, J. Humberto, 2007. "The impact of remittances on poverty and human capital : evidence from Latin American household surveys," Policy Research Working Paper Series 4247, The World Bank.
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    4. Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2008. "What is the Impact of International Remittances on Poverty and Inequality in Latin America?," World Development, Elsevier, vol. 36(1), pages 89-114, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International Remittances; Income Inequality; Africa;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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