International migration and the world income distribution

Devesh Kapur and John McHale
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Devesh Kapur: Centre for Advanced Study of India, University of Pennsylvania, Philadelphia, USA, Postal: Centre for Advanced Study of India, University of Pennsylvania, Philadelphia, USA

Journal of International Development, 2009, vol. 21, issue 8, 1102-1110

Abstract: Emigrants moving from poor to rich countries experience large income gains on average. These gains are further augmented by remittances that allow a portion of the gains to be spent at lower sending-country prices. Taking advantage of recently available estimates of emigration-related income gains, this paper estimates the direct impact of international migration on the world income distribution. We find that international migration raises world income per person by just under 1 per cent, while it raises the incomes of those born in developing countries by approximately 2¼ per cent relative to the no-migration benchmark. Allowing for the remittance price effect augments these gains by about half. International migration also decreases the between-country component of world inequality (as measured by the between-country Theil coefficient) by about 2 per cent. While these aggregate income gains are significant, even small 'brain-drain' related adverse growth effects could quickly swamp the direct gains to migrants where rich-country immigration policies have a strong skill bias. A surer route to realising the potential of migration to increase world welfare would be to expand emigration opportunities for the less skilled. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:21:y:2009:i:8:p:1102-1110

DOI: 10.1002/jid.1649

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