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Remittances and inequality: A dynamic migration model

Author

Listed:
  • Frederic Docquier

    () (FNRS and IRES, Universite Catholique de Louvain)

  • Hillel Rapoport

    () (Department of Economics, Bar-Ilan University, CADRE, Universite de Lille 2, and CReAM, University College London)

  • I-Ling Shen

    () (IRES, Universite Catholique de Louvain)

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.

Suggested Citation

  • Frederic Docquier & Hillel Rapoport & I-Ling Shen, 2006. "Remittances and inequality: A dynamic migration model," CReAM Discussion Paper Series 0614, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:0614
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Migration; remittances; inequality;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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