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Remittances and inequality : A dynamic migration model

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  • Frederic, DOCQUIER

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

  • Hillel, RAPOPORT
  • I-Leng Shen

Abstract

We develop a model to study the effects of migration and remittances on inequality in the origin communities. While wealth inequality is shown to be monotonically reduced along the time-span, the short-and the long-run impacts on income inequality may be of opposite signs, suggesting that the dynamic relationship between migration/remittances and inequality may well be characterized by an inverse U-shaped pattern. This is consistent with the findings of the empirical literature, yet offers a different interpretation from the usually assumed migration network effects. With no need to endogenize migration costs through the role of migration networks, we generate the same result via intergenerational wealth accumulation

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Bibliographic Info

Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2007003.

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Length: 45
Date of creation: 01 Jan 2007
Date of revision:
Handle: RePEc:ctl:louvec:2007003

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Keywords: Migrations; remittances; inequality;

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References

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