IDEAS home Printed from https://ideas.repec.org/a/eme/repspp/reps-06-2020-0072.html

Global economic fluctuations and human development: how is the impact transmitted in Egypt?

Author

Listed:
  • Amira Mohamed Emara
  • Nashwa Mostafa Ali Mohamed

Abstract

Purpose - This paper aims to investigate the relationship between global economic fluctuations and human development through four transmission channels (foreign direct investment (FDI), official development aid (ODA), remittances and export earnings) in Egypt as an open developing economy, in the period 1990–2015. Design/methodology/approach - The paper uses a vector autoregressive model, which implies examining the impulse response functions and variance decompositions. Findings - The results indicate that human development is negatively affected by global economic fluctuations through the four channels, namely, ODA, FDI, export earnings and remittances. In addition, the most effective transmission channels are FDI in the short run and export earnings in the long run. Originality/value - While a large body of literature addresses the direct impact of business cycles and economic shocks on human development, only some studies focus on the indirect impact. The contribution is to identify the indirect impact of global economic fluctuations on human development in a developing economy, considering four transmission channels and to determine the most important of these channels. Moreover, using the human development index is an addition in this paper as most previous literature depends on other human development indicators such as children’s health, employment and schooling.

Suggested Citation

  • Amira Mohamed Emara & Nashwa Mostafa Ali Mohamed, 2021. "Global economic fluctuations and human development: how is the impact transmitted in Egypt?," Review of Economics and Political Science, Emerald Group Publishing Limited, vol. 8(4), pages 250-270, June.
    • Handle: RePEc:eme:repspp:reps-06-2020-0072
    DOI: 10.1108/REPS-06-2020-0072
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/REPS-06-2020-0072/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://www.emerald.com/insight/content/doi/10.1108/REPS-06-2020-0072/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: no
    File URL: https://libkey.io/10.1108/REPS-06-2020-0072?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Serap Bedir, 2015. "The Asymmetric Impact of Growth Fluctuation on Human Development," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 3(2), pages 24-34.
    2. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 311-335.
    3. Christina Paxson & Norbert Schady, 2005. "Child Health and Economic Crisis in Peru," The World Bank Economic Review, World Bank, vol. 19(2), pages 203-223.
    4. Fang, WenShwo & Miller, Stephen M., 2009. "Modeling the volatility of real GDP growth: The case of Japan revisited," Japan and the World Economy, Elsevier, vol. 21(3), pages 312-324, August.
    5. Dang, Hai-Anh & Knack, Stephen & Rogers, F. Halsey, 2013. "International aid and financial crises in donor countries," European Journal of Political Economy, Elsevier, vol. 32(C), pages 232-250.
    6. Stephane Pallage & Michel A. Robe, 2003. "On the Welfare Cost of Economic Fluctuations in Developing Countries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 677-698, May.
    7. Israa A. El Husseiny, 2018. "On the Cyclical Behavior of Fiscal Policy in Egypt," Contemporary Economics, Vizja University, vol. 12(1), March.
    8. Bilal Habib & Ambar Narayan & Sergio Olivieri & Carolina Sanchez, 2010. "The Impact of the Financial Crisis on Poverty and Income Distribution : Insights from Simulations in Selected Countries," World Bank Publications - Reports 10206, The World Bank Group.
    9. McKenzie, David J., 2003. "How do Households Cope with Aggregate Shocks? Evidence from the Mexican Peso Crisis," World Development, Elsevier, vol. 31(7), pages 1179-1199, July.
    10. Levin, Andrew & Raut, Lakshmi K, 1997. "Complementarities between Exports and Human Capital in Economic Growth: Evidence from the Semi-industrialized Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 46(1), pages 155-174, October.
    11. Habib, Bilal & Narayan, Ambar & Olivieri, Sergio & Sanchez, Carolina, 2010. "The Impact of the Financial Crisis on Poverty and Income Distribution: Insights from Simulations in Selected Countries," World Bank - Economic Premise, The World Bank, issue 7, pages 1-4, March.
    12. Friedman, Jed & Schady, Norbert, 2009. "How many more infants are likely to die in Africa as a result of the global financial crisis ?," Policy Research Working Paper Series 5023, The World Bank.
    13. Stéphane Pallage & Michel A. Robe, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-672, November.
    14. Paul DE BEER, 2012. "Earnings and income inequality in the EU during the crisis," International Labour Review, International Labour Organization, vol. 151(4), pages 313-331, December.
    15. Black, Sandra E. & Sokoloff, Kenneth L., 2006. "Long-Term Trends in Schooling: The Rise and Decline (?) of Public Education in the United States," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 2, pages 69-105, Elsevier.
    16. Nasim Shah Shirazi & Sajid Amin Javed & Dawood Ashraf, 2018. "Remittances, Economic Growth and Poverty: A Case of African OIC Member Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(2), pages 121-143.
    17. Duryea, Suzanne & Lam, David & Levison, Deborah, 2007. "Effects of economic shocks on children's employment and schooling in Brazil," Journal of Development Economics, Elsevier, vol. 84(1), pages 188-214, September.
    18. Goldin, Claudia, 2001. "The Human-Capital Century And American Leadership: Virtues Of The Past," The Journal of Economic History, Cambridge University Press, vol. 61(2), pages 263-292, June.
    19. Adenutsi, Deodat E., 2010. "Do international remittances promote human development in poor countries? Empirical evidence from Sub-Saharan Africa," MPRA Paper 29347, University Library of Munich, Germany.
    20. Stephany Griffith-Jones & José Antonio Ocampo, 2009. "The Financial Crisis and Its Impact on Developing Countries," Working Papers 53, International Policy Centre.
    21. Sharma Basu & Gani Azmat, 2004. "The Effects of Foreign Direct Investment on Human Development," Global Economy Journal, De Gruyter, vol. 4(2), pages 1-20, December.
    22. Reiter, S.L. & Steensma, H. Kevin, 2010. "Human Development and Foreign Direct Investment in Developing Countries: The Influence of FDI Policy and Corruption," World Development, Elsevier, vol. 38(12), pages 1678-1691, December.
    23. Ulrichs Magdalena, 2018. "Identification of Financial and Macroeconomic Shocks in a Var Model of the Polish Economy. A Stability Analysis," Economics and Business Review, Sciendo, vol. 4(1), pages 29-43, April.
    24. Ali Reza Oryoie & Jeffrey Alwang, 2018. "School attendance and economic shocks: Evidence from rural Zimbabwe," Development Southern Africa, Taylor & Francis Journals, vol. 35(6), pages 803-814, November.
    25. Norbert Schady & Francisco H.G. Ferreira, 2009. "Social Consequences of the Global Financial Crisis in Latin America : Some Preliminary, and Surprisingly Optimistic, Conjectures," World Bank Publications - Reports 10957, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sabarwal, Shwetlena & Sinha, Nistha & Buvinic, Mayra, 2010. "How do women weather economic shocks ? a review of the evidence," Policy Research Working Paper Series 5496, The World Bank.
    2. Dessy, Sylvain & Gninafon, Horace & Tiberti, Luca & Tiberti, Marco, 2023. "Free compulsory education can mitigate COVID-19 disruptions’ adverse effects on child schooling," Economics of Education Review, Elsevier, vol. 97(C).
    3. Ferreira, Francisco H. G. & Schady, Norbert, 2008. "Aggregate economic shocks, child schooling and child health," Policy Research Working Paper Series 4701, The World Bank.
    4. Cruces, Guillermo & Gluzmann, Pablo & Lopez-Calva, Luis Felipe, 2010. "Permanent Effects of Economic Crises on Household Welfare: Evidence and Projections from Argentina’s Downturns," MPRA Paper 42949, University Library of Munich, Germany.
    5. Koseleci, Nihan. & Rosati, Furio C., 2009. "Child labour and the global financial crisis an issues paper," ILO Working Papers 994556893402676, International Labour Organization.
    6. Cruces, Guillermo & Glüzmann, Pablo & Calva, Luis Felipe López, 2012. "Economic Crises, Maternal and Infant Mortality, Low Birth Weight and Enrollment Rates: Evidence from Argentina’s Downturns," World Development, Elsevier, vol. 40(2), pages 303-314.
    7. Kiendrebeogo, Youssouf & Assimaidou, Kossi & Tall, Abdoulaye, 2017. "Social protection for poverty reduction in times of crisis," Journal of Policy Modeling, Elsevier, vol. 39(6), pages 1163-1183.
    8. M. Manacorda & F.C. Rosati, 2008. "Industrial structure and child labour. Evidence from Brazil," UCW Working Paper 44, Understanding Children's Work (UCW Programme).
    9. Anousheh Alamir & Tillmann Heidelk, 2020. "Natural Disasters and Education," Working Papers ECARES 2020-05, ULB -- Universite Libre de Bruxelles.
    10. Asma Hyder & Jere R Behrman & Hans-Peter Kohler, 2015. "Negative economic shocks and child schooling: Evidence from rural Malawi," Development Southern Africa, Taylor & Francis Journals, vol. 32(4), pages 458-476, July.
    11. Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 57, pages 3607-3709, Elsevier.
    12. Feindouno, Sosso & Arcand, Jean-Louis & Guillaumont, Patrick, 2024. "COVID-19's death transfer to Sub-Saharan Africa," Social Science & Medicine, Elsevier, vol. 340(C).
    13. Sabarwal, Shwetlena & Sinha, Nistha & Buvinic, Mayra, 2011. "How Do Women Weather Economic Shocks? What We Know," World Bank - Economic Premise, The World Bank, issue 46, pages 1-6, January.
    14. Dasgupta, Basab & Ajwad, Mohamed Ihsan, 2011. "Income shocks reduce human capital investments : evidence from five east European countries," Policy Research Working Paper Series 5926, The World Bank.
    15. Denis Cogneau & Rémi Jedwab, 2012. "Commodity Price Shocks and Child Outcomes: The 1990 Cocoa Crisis in Côte d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 507-534.
    16. Bhalotra, Sonia R. & Umana-Aponte, Marcela, 2010. "The Dynamics of Women's Labour Supply in Developing Countries," IZA Discussion Papers 4879, IZA Network @ LISER.
    17. Marcelo Côrtes Neri & Emily Gustafsson-Wright & Guilherme Sedlacek & Peter F. Orazem, 2009. "The Responses of Child Labor, School Enrollment, and Grade Repetition to the Loss of Parental Earnings in Brazil, 1982–1999," Palgrave Macmillan Books, in: Peter F. Orazem & Guilherme Sedlacek & Zafiris Tzannatos (ed.), Child Labor and Education in Latin America, chapter 3, pages 55-68, Palgrave Macmillan.
    18. Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
    19. Peter J. Glick & David E. Sahn & Thomas F. Walker, 2016. "Household Shocks and Education Investments in Madagascar," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 792-813, December.
    20. Lim, Sung Soo, 2020. "Parental chronic illness and child education: Evidence from children in Indonesia," International Journal of Educational Development, Elsevier, vol. 73(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:repspp:reps-06-2020-0072. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.