The effects of international remittances on poverty, inequalities, and development in rural Egypt

Many low-income people, especially those from poor rural areas, seek to improve their lives by immigrating in search of work and income, increasingly moving across national borders and further afield. In recent years, the remittances they earn have come to have an important effect on the economies of many developing countries, profoundly affecting poverty, income distribution, and rural economic development in the villages from which the migrated. The results of this study compliment the findings of other IFPRI studies on poverty alleviation, income sources, and rural development. The study uses primary household data from small area of rural Egypt in a innovative way to address such vital questions as who immigrates, how remittances affect poverty and income inequality in the receiving villages, and how spending by returning immigrants facilitates local development. The finding of this study that the rural poor, who actively participate in international migration, tend to invest their remittance earning rather than spending on own or family consumption has broad implications for policy planning of countries that send many migrants abroad.