International Remittances And Income Inequality In Africa
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.
Volume (Year): (2011)
Issue (Month): 7 (May)
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- Acosta, Pablo & Calderon, Cesar & Fajnzylber, Pablo & Lopez, Humberto, 2007.
"What is the impact of international remittances on poverty and inequality in Latin America ?,"
Policy Research Working Paper Series
4249, The World Bank.
- 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.
- 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.
- Adams, Richard H, Jr, 1989. "Worker Remittances and Inequality in Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 38(1), pages 45-71, October.
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