“To Have and Have Not”: Migration, Remittances, Poverty and Inequality in Algeria

This article analyses the distributional impact of international migration across two regions of Algerian emigration (Nedroma and Idjeur) using an original survey we conducted of 1,200 households in 2011. The non-parametric technique of DiNardo, Fortin and Lemieux (1996) is used to analyse the effects of remittances on the distribution of household incomes. The analysis is then deepened with a parametric model, which allows for the estimation of counterfactual household income and the calculation of the impact of migration on the distribution of household income. Remittances, and especially foreign pensions, decrease the Gini index by nearly 4 % for the two Algerian regions combined, with the effect in Idjeur being twice as large as Nedroma. At the same time, they help reduce poverty by nearly 13 percentage points. Remittances have a strong positive impact on very poor families in Idjeur but much less in Nedroma, where poor families suffer from a “double loss” due to the absence of their migrants and the fact that the latter do not send money home.