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Title: Remittances, income inequality and non-linearity: Evidence from Pakistan
Authors: Shahbaz, Muhammad 
Keywords: Μεταναστευτικά εμβάσματα -- Πακιστάν;Emigrant remittances -- Pakistan;Πακιστάν -- Αποδημία και εποίκηση;Pakistan -- Emigration and immigration
Issue Date: 2008
Publisher: ΤΕΙ Ηπείρου. Σχολή Διοίκησης και Οικονομίας
Journal: Επιθεώρηση Οικονομικών Επιστημών;Τεύχ. 13 
Abstract: Present paper explains large empirical literature and demonstrates evidence on the relationship between international remittances and distribution of income. Using large time series data covering period 1971-2006 and two advanced techniques [Johansen Trace-test, DOLS method and ARDL) model for co-integration, we found robust evidence of long run relationship among the said variables. In the case of Pakistan, the relationship between international remittances and income inequality is U-shaped indicating that inequality initially decreases and then increases as migration history continues. Our empirical findings support the evidence that international remittances increase inequality in the long run while local migration improves income distribution. lncrease in per capita income pushes income inequality in the upward direction, which means, inequality is encouraged by an increase in per capita income. Improvements in human capital formation worsen the situation of income distribution. Inflation lowers the purchasing power of poor individuals in the economy and raises inequality through its detrimental channe ls like wise unemployment. lncrease in government consumption worsens the income inequality, which indicates that rich households use their political powers to exploit the poor, which raises the income inequality swiftly. The present endeavor presents some policy implications for policy makers in a small developing country like Pakistan.
ISSN: 1109-2629
Appears in Collections:Επιθεώρηση Οικονομικών Επιστημών

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