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Remittances and income inequality in rural Nigeria

Author

Listed:
  • Olowa Olatomide Waheed

    (Department of Agricultural Education, Federal College of Education (Technical) Akoka)

  • Adebayo M. Shittu

    (Department of Agricultural Economics and Management, Federal University of Agriculture, Abeokuta)

Abstract

The paper studies the effect of remittances on inequality in rural Nigeria using the Nigeria Living standard survey collected in 2004 by Nigeria Bureau of Statistics. This study decomposed income inequality in rural Nigeria using the Gini-decomposition and regression-based approaches to investigate the contribution of remittance to income inequality in Rural Nigeria. Results shows Domestic remittances seem more likely to be income equalizing than foreign remittances. Education is associated with lower domestic remittances and higher international remittances, probably reflecting the role of education in promoting international versus domestic migration. An increase in schooling increases inequality through domestic remittances and decreases inequality through international remittances, while a reduction in household size reduces inequality through both domestic and international remittances. This analysis highlights the importance of the distinction between domestic and international remittances as drivers of inequality as well as the importance of identifying and quantifying the determinants of remittances and their subsequent impact on inequality.

Suggested Citation

  • Olowa Olatomide Waheed & Adebayo M. Shittu, 2012. "Remittances and income inequality in rural Nigeria," E3 Journal of Business Management and Economics., E3 Journals, vol. 3(5), pages 210-221.
    • Handle: RePEc:etr:series:v:3:y:2012:i:5:p:210-221
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    References listed on IDEAS

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    Cited by:

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    2. Siriwardhane, Dinesha & Amaratunge, Sampath, 2018. "Remittances and Risk Diversification in Developing Country Context: Evidence from Sri Lanka," MPRA Paper 107235, University Library of Munich, Germany, revised 04 Jun 2018.

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