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Remittances and Inequality: The Post-Communist Region

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  • Azizbek Tokhirov
  • Jaromír Harmáček
  • Miroslav Syrovátka

Abstract

This study aims to investigate the impact of international remittances on income inequality in the post-communist region. The association between the variables is examined via static and dynamic panel models. Using macroeconomic data from 27 countries over the period 1991-2014, we discover that income inequality progresses along a U-shaped course as a country becomes more dependent on remittances. For most of the countries, the relationship between remittances and inequality is inverse. When remittances account for more than 20% of GDP, they exacerbate economic inequality. This finding challenges the view that remittances should only be viewed as a pro-poor redistribution mechanism because in certain cases, additional migrant transfers may actually increase income inequality.

Suggested Citation

  • Azizbek Tokhirov & Jaromír Harmáček & Miroslav Syrovátka, 2021. "Remittances and Inequality: The Post-Communist Region," Prague Economic Papers, Prague University of Economics and Business, vol. 2021(4), pages 426-448.
    • Handle: RePEc:prg:jnlpep:v:2021:y:2021:i:4:id:776:p:426-448
    DOI: 10.18267/j.pep.776
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    References listed on IDEAS

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    1. Piracha, Matloob & Saraogi, Amrita, 2013. "Remittances and Migration Intentions of the Left-Behind," IZA Discussion Papers 7779, Institute of Labor Economics (IZA).
    2. Anzelika Zaiceva, 2014. "Post-enlargement emigration and new EU members' labor markets," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-40, August.
    3. Rao, B. Bhaskara & Hassan, Gazi Mainul, 2011. "A panel data analysis of the growth effects of remittances," Economic Modelling, Elsevier, vol. 28(1), pages 701-709.
    4. Frederick Solt, 2016. "The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 97(5), pages 1267-1281, November.
    5. repec:iza:izawol:journl:y:2014:p:40 is not listed on IDEAS
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    Cited by:

    1. Biljana Tashevska & Daniela Bojadjieva & Gunter Merdzan, 2023. "The Effects Of Remittances On Poverty And Inequality Alleviation In Selected Central And South-East European Countries," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 9, pages 183-207, Faculty of Economics and Business, University of Belgrade.
    2. repec:beo:swcetp:23-09 is not listed on IDEAS
    3. Mallela, Keerti & Singh, Sunny Kumar & Srivastava, Archana, 2023. "Remittances, financial development, and income inequality: A panel quantile regression approach," International Economics, Elsevier, vol. 175(C), pages 171-186.

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    More about this item

    Keywords

    Income inequality; migration; international remittances; post-communism;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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