Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others?
AbstractAccording to the literature, the eﬀect of remittances on income inequality in origin countries of migrants is not clear, whatever empirical approach is used. Aiming at clearing up this ambiguity, some authors took into account the historical, social or economic context of the home countries considered. The underlying idea of most of these studies is actually that the impact of remittances on income inequality depends on whom migrates, i.e. on the location migrants occupy in income distribution in their home country. However, to our knowledge, no macroeconomic study examining the remittances eﬀect on inequality, consider the composition of migratory ﬂows. To reveal at the macroeconomic level the position of migrants in income distribution at origin, we introduce in our equation of inequality non-linearities in the level of development of the recipient countries, in the costs of migration and in the level of brain drain. Using a panel sample of 80 developing countries over the period 1970-2000, and even by factoring in the endogeneity of remittances, this paper provides evidence of some characteristics of countries of origin in which there is an inequality-decreasing eﬀect of remittances on income inequality. It turns out that countries belonging to the Mediterranean Basin have the characteristics revealed.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 200919.
Date of creation: 2009
Date of revision:
Migrants’ remittances; Income; migration costs; Brain drain; income inequality; instrumental variables; Mediterranean basin;
Other versions of this item:
- Christian Ebeke & Maëlan Le Goff, 2011. "Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others?," Working Papers halshs-00554277, HAL.
- NEP-ALL-2009-12-05 (All new papers)
- NEP-DEV-2009-12-05 (Development)
- NEP-INT-2009-12-05 (International Trade)
- NEP-MIG-2009-12-05 (Economics of Human Migration)
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- Petreski, Marjan & Jovanovic, Branimir, 2013. "Do Remittances Reduce Poverty and Inequality in the Western Balkans? Evidence from Macedonia," MPRA Paper 51413, University Library of Munich, Germany.
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