Labour Emigration and Income Inequality Effects in Sending Countries: Evidence from Nigeria

Abstract

Labour emigration is considered an alternative source of income and earnings in developing countries, particularly, those with large populations and high unemployment rates. This paper empirically investigates the relationship between income inequality and labour emigration, and the effects of labour emigration on income inequality in the source country using Nigeria as evidence. Annual time series on income inequality (Gini coefficient), remittance inflow, net migration rate and others are variables used for the model covering the span of 41 years (1980-2021) Correlation Matrix and the Ordinary Least Square (OLS) models are employed to estimate the model. The findings reveal that the correlation relationship between labour emigration and income inequality in sending country (Nigeria) is a very weak positive one (0.39). While the OLS shows an insignificant positive relationship. This implies that a direct significant link between income inequality and labour emigration at the macro level was not established. Therefore, labour mobility should not be restricted, but rather restructured to maximise the full benefits at the macro level in Nigeria.