Transforming Rural Economies: Migration, Income Generation and Inequality in Rural Mexico

We analyse how migration shapes the distribution and sources of rural income using nationally representative panel data from Mexico. Income source Gini decompositions provide some support for the migration diffusion hypothesis. Nevertheless, migration's influence on other income sources and household re-ranking substantially alter distributional impacts. We find significant impacts of migration on non-remittance income, as well as changes in the effects of non-migration activities on inequality over time. We conclude that migration is transforming rural economies in ways that go beyond the scope of most past research on migration and inequality.