International Migration, Population Growth and Global Income Inequality

Iñaki Permanyer , Center for Demographic Studies

Global income inequality indicates the extent to which monetary resources are concentrated across individuals among and within countries around the globe. The demographic composition of world’s countries is thus intimately related to such inequality and its dynamics. In this paper we assess how global income inequality is affected by the two main drivers of population change: countries’ natural growth and international migration. The highly political and sensitive nature of these phenomena, together with the scarcity of reliable statistical data, has promoted the elaboration of untested hypotheses running in opposite directions. Applying decomposition and counterfactual techniques to a variety of economic and demographic data sources, our findings suggest that population dynamics are a non-negligible and increasingly important factor (often more important than the changes in income inequality within countries) that has been largely overlooked in the study of global income inequality. The unequal rates of natural population growth between 1990 and 2020 (with higher rates typically occurring in low- and lower-middle income countries) have contributed to concentrate increasingly higher shares of the world population at the bottom of the income distribution, thus pushing global income inequality upwards. The effect of international migration flows on global income inequality is contingent on the chosen inequality measure, ranging between small but “positive” (i.e., inequality enhancing) effects for some measures and negligible effects for others. The inequality enhancing effects of international migration flows are largely attributable to the relatively large migration flows between lower-middle and, specially, upper-middle income countries towards high income countries.

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 Presented in Session 48. International Migration and Global Challenges