Worker Remittances and Inequality in Rural Egypt

Abstract

This study analyzes the impact of international migration and remittances on the rural socioeconomic order in Egypt. The empirical findings show that age marital status employment size of land farmed and number of household males over 13 years are all statistically related to the decision of an individual to go work abroad. The variables age size of land farmed employment as a "student" and number of household males over 13 years of age are all negatively related to the decision to work abroad while the influence of all the other variables is positive. The study shows that the remittance earnings of migrants abroad had a negative impact on rural income distribution in Egypt. The data indicate that remittances from abroad worsened rural household income distribution--both in gross terms and in per capita terms--because they were earned mainly by upper income villagers. Regardless of whether households are ranked in terms of gross income or per capita income households in the top income quintile benefited the most from remittances. The findings thus tend to confirm those of Gilani Khan and Iqbal and of Lipton to the effect that international remittances have a deleterious effect on rural income distribution because they are earned mainly by upper income villagers. However it should be noted that the negative impact of remittances on rural income distribution was neither automatic nor inevitable. In the once-abroad category of migrants the poorest households did send virtually the same number of workers abroad as households in the upper income groups. Had households sending migrants abroad been as evenly distributed in the past it may be logically inferred that the impact of remittances on rural income distribution would also have been more equitable.