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Estimating the net effects of migration and remittances on poverty and inequality: comparison of Fiji and Tonga

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  • Richard P.C. Brown

    (School of Economics, University of Queensland, Brisbane, Australia)

  • Eliana Jimenez

    (School of Economics, University of Queensland, Brisbane, Australia)

Abstract

We use original 2005 household survey data from Fiji and Tonga to estimate the impact of migration and remittances on income distribution and measures of poverty. Measures of inequality and poverty based on observed, with-migration income and remittances are then compared with those based on two without-migration and remittances scenarios; one in which remittances are treated simplistically as an exogenous addition to household income, and another in which counterfactual household incomes are estimated, taking account of what the migrant members would have earned had they not migrated. The estimated effects of remittances on poverty alleviation were found to be stronger when the more rigorous, counterfactual income estimates are used, but their effect on income inequality was found to be ambiguous. The extent to which migration and remittances alleviate poverty was also found to be more substantial in Tonga, the country with a much longer migration history and higher remittance dependence. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Richard P.C. Brown & Eliana Jimenez, 2008. "Estimating the net effects of migration and remittances on poverty and inequality: comparison of Fiji and Tonga," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(4), pages 547-571.
  • Handle: RePEc:wly:jintdv:v:20:y:2008:i:4:p:547-571
    DOI: 10.1002/jid.1474
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    1. Hagenaars, Aldi J M & van Praag, Bernard M S, 1985. "A Synthesis of Poverty Line Definitions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(2), pages 139-154, June.
    2. 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.
    3. Stark, Oded & Levhari, David, 1982. "On Migration and Risk in LDCs," Economic Development and Cultural Change, University of Chicago Press, vol. 31(1), pages 191-196, October.
    4. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
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