International Labour Migration, Remittances and Income Inequality in a Developing Country: The Case of Sri Lanka

Abstract

With the increasing demand for foreign domestic labour from Sri Lanka, the recorded number of migrant workers was 1.5 million persons by 2006. Consequently, remittances of migrants showed a corresponding rise amounting to an average annual rate of 10 per cent over the past thirty years. This is one of the largest sources of foreign financing. Sri Lanka has been displaying a growing trend of income inequality since the late 1970s and based on the available data the authors suggest that the increasing number of international migrants together with the increasing remittances generate higher income inequality in the country. They therefore recommend that policy makers should take due cognizance of these observations and provide remedial action.