Remittances, Inequality and Social Welfare in Rural Nigeria

Olowa, Olatomide Waheed; Awoyemi, Timothy Taiwo; Omonona, Bolarin; Olowa, Omowumi Ayodele
October 2011
IUP Journal of Agricultural Economics;Oct2011, Vol. 8 Issue 4, p7
Academic Journal
This study uses a nationwide household survey to analyze the impact of domestic and international remittances on household income and welfare in Nigeria. The impact of remittances on income distribution and social welfare is analyzed by source decomposition of income inequality and comparing the observed level of measures with the level of the complete termination of remittances. The empirical findings demonstrate that the aggregate impact of all remittances on overall income inequality is stable and that international remittances generally have unequalizing effects both at rural level and in all the geopolitical zones, while the opposite holds for the internal remittances. Although an unambiguous welfare gain is associated with all types of remittances, the magnitude of the welfare gain is dependent on the degree of income inequality induced by the remittances. Nevertheless, internal remittances from Nigeria are found to be the main contributors to net welfare gains by increasing income and decreasing inequality.


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