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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 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.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10888-009-9110-y
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Bibliographic Info

Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 8 (2010)
Issue (Month): 2 (June)
Pages: 197-220

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Handle: RePEc:kap:jecinq:v:8:y:2010:i:2:p:197-220

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Web page: http://springerlink.metapress.com/link.asp?id=111137

Related research

Keywords: Inequality; Migration; Remittances;

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References

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  7. Ilahi, Nadeem, 1999. "Return Migration and Occupational Change," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 170-86, June.
  8. Rapoport, Hillel & Docquier, Frédéric, 2005. "The Economics of Migrants’ Remittances," IZA Discussion Papers 1531, Institute for the Study of Labor (IZA).
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  25. Taylor, J. Edward, 1992. "Remittances and inequality reconsidered: Direct, indirect, and intertemporal effects," Journal of Policy Modeling, Elsevier, vol. 14(2), pages 187-208, April.
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  33. Alice Mesnard, 2004. "Temporary migration and self-employment: evidence from Tunisia," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(1), pages 119-138.
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