How Do Migration and Remittances Affect Inequality? A Case Study of Mexico

Download or read book How Do Migration and Remittances Affect Inequality? A Case Study of Mexico written by Zsoka Koczan and published by International Monetary Fund. This book was released on 2018-06-14 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: The poverty-reducing effects of remittances have been well-documented, however, their effects on inequality are less clear. This paper examines the impact of remittances on inequality in Mexico using household-level information on the receiving side. It hopes to speak to their insurance role by examining how remittances are affected by domestic and external crises: the 1994 Mexican Peso crisis and the Global Financial Crisis. We find that remittances lower inequality, and that they become more pro-poor over time as migration opportunities become more widespread. This also strengthens their insurance effects, mitigating some of the negative impact of shocks on the poorest.