INTERNATIONAL REMITTANCES AND INCOME INEQUALITY IN AFRICA
INTERNATIONAL REMITTANCES AND INCOME INEQUALITY IN AFRICA
Author(s): John C. ANYANWUSubject(s): National Economy, Economic history, Economic policy, Government/Political systems, Post-War period (1950 - 1989), Transformation Period (1990 - 2010), Socio-Economic Research
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: International Remittances; Income Inequality; Africa;
Summary/Abstract: This paper investigates the impact of migrant remittances on income inequality in African countries, using a panel of five eight-year non overlapping windows for the period 1960-2006. The results suggest that, first, international migrant remittances have a significant positive impact on income inequality in African countries. After instrumenting for the possible endogeneity of remittances, a 10 percent increase in remittances as a percentage of GDP will lead, on average, to a 0.013 percent increase in income inequality in Africa. Second, initial per capita GDP strongly increases income inequality. Third, inflation rate appears to be the strongest factor fueling income inequality in the Continent. Fourth, education significantly reduces income inequality. Fifth, the North African dummy and remittances inflows to North Africa largely reduce income inequality in the sub-region while doing the opposite in Sub-Saharan Africa. The policy implications of these results are discussed.
Journal: Review of Economic and Business Studies (REBS)
- Issue Year: 2011
- Issue No: 7
- Page Range: 117-148
- Page Count: 32
- Language: English
