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Remittances and Inequality: A Dynamic Migration Model

Frédéric Docquier () and Hillel Rapoport

No 808, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a model of the interdependencies between migration, remittances and inequality, and investigate how migration and subsequent remittances affect inter-household inequality in the origin communities. An important feature of our model is that we take into account the impact of migration on the local (rural) labor market. Migration is shown to decrease wealth inequality but may generate higher income inequality. Moreover, the short-run and long-run impacts of migration on income inequality may also be of opposite signs, suggesting that the dynamic relationship between migration and inequality may well be characterized by an inverse U-shaped pattern. This is consistent with the findings of the empirical literature on remittances and inequality, but offers a different interpretation, with no need to endogenize migration costs through the role of migrant networks.

Keywords: inequality; remittances; migration (search for similar items in EconPapers)
JEL-codes: O11 O15 J61 D31 (search for similar items in EconPapers)
Date: 2003-06
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Related works:
Journal Article: Remittances and inequality: a dynamic migration model (2010) Downloads
Working Paper: Remittances and inequality: A dynamic migration model (2007) Downloads
Working Paper: Remittances and inequality: A dynamic migration model (2006) Downloads
Working Paper: Remittances and Inequality: A Dynamic Migration Model (2003) Downloads
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