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Full-Text Articles in International Economics
Remittances, Institutions, And Inequality In Developing Countries, Karla Borja, Joshua D. Hall
Remittances, Institutions, And Inequality In Developing Countries, Karla Borja, Joshua D. Hall
Journal for the Advancement of Developing Economies
The private transfers sent by immigrant workers back to their home countries, or remittances, can improve the development of recipient countries through poverty reduction, higher education, and new business formation. However, the effect of remittances on income inequality is still debatable. While some studies suggest that these transfers are sent to the poor, other investigations find that remittances are directed toward higher-income cohorts, widening the gap between rich and poor. This study provides new evidence about potential income inequality reduction driven by remittances and quality of institutions. For instance, weak institutions discourage the usage of remittances toward productive ventures, more …