Remittances and inequalities : A dynamic migration model

Docquier, Frédéric;Rapoport, Hillel;Shen, I-Ling
(2007)

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  • Docquier, Frédéric
    Author
  • Rapoport, Hillel
    Author
  • Shen, I-Ling
    Author
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 longrun 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.
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Docquier, F., Rapoport, H., & Shen, I.-L. (2007). Remittances and inequalities : A dynamic migration model (ECON Working Papers 2007/03). https://hdl.handle.net/2078.5/34720