Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others?

Maëlan Le Goff () and Christian Hubert Ebeke ()
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Maëlan Le Goff: Centre d'Etudes et de Recherches sur le Développement International(CERDI)

No 200919, Working Papers from CERDI

Abstract: According to the literature, the e?ect of remittances on income inequality in origin countries of migrants is not clear, whatever empirical approach is used. Aiming at clearing up this ambiguity, some authors took into account the historical, social or economic context of the home countries considered. The underlying idea of most of these studies is actually that the impact of remittances on income inequality depends on whom migrates, i.e. on the location migrants occupy in income distribution in their home country. However, to our knowledge, no macroeconomic study examining the remittances e?ect on inequality, consider the composition of migratory ?ows. To reveal at the macroeconomic level the position of migrants in income distribution at origin, we introduce in our equation of inequality non-linearities in the level of development of the recipient countries, in the costs of migration and in the level of brain drain. Using a panel sample of 80 developing countries over the period 1970-2000, and even by factoring in the endogeneity of remittances, this paper provides evidence of some characteristics of countries of origin in which there is an inequality-decreasing e?ect of remittances on income inequality. It turns out that countries belonging to the Mediterranean Basin have the characteristics revealed.

Keywords: Migrants’ remittances; Income; Migration costs; Brain drain; Income inequality; Instrumental variables; Mediterranean basin (search for similar items in EconPapers)
Pages: 41
Date: 2009
New Economics Papers: this item is included in nep-dev, nep-int and nep-mig
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others? (2011)
Working Paper: Why Migrants' Remittances Reduce Income Inequality in some Countries and not in Others? (2011)
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