Migration, remittances and inequality: A sensitivity analysis using the extended Gini index

Abstract

This paper uses the extended Gini inequality index to examine the sensitivity of measurements of impacts of migrant remittances on the distribution of household income by size to different value judgements when measuring inequality. The results illustrate the robustness of earlier findings that the impacts of migration on village income distributions differ for different types of migration and for different periods in a village's migration history. The magnitude of these impacts, however, appears to be quite sensitive to the weights attached to incomes at different points in the village income distribution. For example, in a village with considerable Mexico-to-U.S. migration experience, remittances from Mexico-to-U.S. migrants have a favorable effect on the village income distribution. However, the extended Gini analysis shows that this favorable impact decreases as more weight is attached to incomes in the poorest households. This finding is consistent with the view that barriers to high-paying Mexico-to-U.S. migration work exist for households at the bottom of the village income distribution.