Causes and Impacts of Remittances: Household Survey Evidence from Egypt

Abstract

This research provides a qualitative and empirical investigation of the microeconomic causes and impacts of remittances in Egypt. We use data from a field study, involving interviews of 304 remittance-receiving families across 16 Egyptian governorates during May 2015–May 2016. Our Ordinary Least Square (OLS) and Tobit regressions show that the duration of migration, migrant’s age, household income, and household head’s job are the most important predictors of the level of remittances. The first three variables induce the value of received remittances, while the final variable, household head’s job, acts to the contrary and reduces remittances. In terms of remittances allocation, everyday expenses and real estate investments absorb the vast majority of channeled remittances. Most of the respondents (85%) do not invest remittances, and those who invest remittances mainly reside in Upper and Lower Egypt due to the low living costs in these regions.

Keywords: remittances, Egypt, altruistic, self-interest, Tobit

JEL Classification: D14, J6, O15