The Effects of Immigration on the Inequalities of Individual Incomes: Empirical Evidence and Policy Proposals

The migration phenomenon has been studied intensively by economists, both from the theoretical point of view and from the empirical. Several studies, in particular, have analysed its effect on the labour market, public finances and the economic growth. Economic literature has, in addition, examined the role of labour mobility in the reduction of regional disparities and the inequalities of individual incomes. In fact, migration is closely connected to the issues of taxation, inequality and public welfare benefits, both in the source and the host countries. Studies that have been done so far, however, show a tendential contradiction between theory and empirical evidence. The evidence on the effects on inequality, for example, suggests that the remittances by immigrants are very often received by high-income families, who already have sufficient resources to emigrate, and this could produce an increase in the inequality. However, as globalization has lead to the growth and the rootedness of the relational networks of migrants, as well as to a notable reduction in the transfer costs of individuals, migration may also constitute a useful tool to reduce the inequalities and to overcome poverty. The results of these studies suggest, therefore, the need for ulterior research on the fiscal impact of international migrations and their effects on the inequalities, especially in the long run. The study aims at furnishing a contribution to this by offering an analysis of the empirical evidence about the redistributive effects of immigration and policy proposals for the Italian case.