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Do Remittances Mitigate Income Disparity in China and India? Evidence from Structural Break Regression Models

Year: 2025

Type: article

Abstract: Over the last few decades, India and China have received significant remittances from abroad. However, there is no clear evidence that these remittances positively or negatively impact income distribution. Therefore, this study explores the role of remittances in income inequality in China and India. This study also investigates the factors determining income inequality in two major emerging market economies. Using annual data from 1982 to 2021, this study applies structural break regression models for empirical investigation. The result reveals that remittances positively impacted income inequality until the early 2000s but are statistically insignificant. However, remittances have had a reducing effect on inequalities in recent years for both economies. The results also show that financial development, per capita income and the internationalisation of trade positively contribute to inequality in both countries. In contrast, FDI reduces inequality in China and increases in India. Given the varying impact of remittances on income inequality, this study offers several policy implications for China and India. JEl Classification: E22, E25, F21, F43

Source: Journal of Asian Economic Integration

DOI: 10.1177/26316846251316942

Authors: Sakthivel P, Durairaj Kumarasamy, Vamsi Krushna A

Institutions: GITAM University, Manav Rachna International Institute of Research and Studies

Language: English

Topic: Income, Poverty, and Inequality

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty, Decent work and economic growth

Open Access status: bronze

OpenAlex ID: W4407543448

FWCI: 3.557

Cites: 37

Cited by: 2

Related to: 10