Remittances and Inequality: A Dynamic Migration Model

34 Pages Posted: 14 Jul 2003

See all articles by Frédéric Docquier

Frédéric Docquier

Université catholique de Louvain; CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Hillel Rapoport

Bar-Ilan University - Department of Economics; Stanford University

Date Written: June 2003

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: Migration, Remittances, Inequality

JEL Classification: O11, O15, J61, D31

Suggested Citation

Docquier, Frédéric and Rapoport, Hillel, Remittances and Inequality: A Dynamic Migration Model (June 2003). IZA Discussion Paper No. 808. Available at SSRN: https://ssrn.com/abstract=422546

Frédéric Docquier (Contact Author)

Université catholique de Louvain ( email )

IRES
Place Montesquieu 3
Louvain-la-Neuve, 1348
Belgium

HOME PAGE: http://https://perso.uclouvain.be/frederic.docquier/

CREAM, Centre for Research on Environmental Appraisal & Management, UK

University of Newcastle
NE1 7RU Newcastle Upon Tyne
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hillel Rapoport

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972 3 535 3180 (Fax)

Stanford University ( email )

Stanford, CA 94305
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
504
Abstract Views
2,175
rank
57,138
PlumX Metrics