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  • Title: [The effects of manpower emigration on income distribution and consumption models in the Egyptian economy].
    Author: Abdel Fadil M.
    Journal: Tiers Monde (1960); 1985; 26(103):507-22. PubMed ID: 12280372.
    Abstract:
    This work analyzes the effects of emigration from Egypt on the distribution of income and the consumption model of the Egyptian economy. The increasing role of remittances as a principal source of household income has disturbed the old division of income among socioeconomic groups. It is difficult to estimate the volume of remittances with any precision because of the variety of ways in which they can be made. Official statistics tend to underestimate their value by ignoring black market transactions, remittances of merchandise, and other forms. An estimate was made of the value of remittances in 1980 taking account of wage levels of 5 different types of workers in the principal employing countries, their average propensities to save, and the employment structure of migrants by socioprofessional groups. The average educational level of emigrants appears to have declined somewhat between 1972-78. Average monthly income for emigrants was estimated to range from 792 Egyptian pounds for technical and professional workers to 252 for unskilled workers and the propensity to save was estimated to range from 40% for technical and scientific workers to 15% for unskilled workers. The total income remitted in 1980 in millions of Egyptian pounds was estimated at 912 for 240,000 technical and scienfific workers, 739 for 360,000 intermediate level workers, 415 for 300,000 artisans and workers, 60 for 60,000 chauffeurs, and 109 for 240,000 unskilled workers. Although remittances have elevated the per capita income of the low income groups, their impact has been diminished by severe inflationary pressures which have led to a decline in living levels and a less complete satisfaction of basic needs. Salary levels of construction workers were 7-9 times higher in Egyptian pounds in 1977 in 3 countries of immigration than in Egypt, while they were 7-10 times higher in 4 countries for university professors. Remittances are used by families receiving them for subsistence or investment; lower income groups are more likely to use a large proportion for support and to buy locally produced goods, while higher income groups tend to save more and to purchase a larger proportion of imported goods. 1 of the significant effects of remittances is to orient individual consumption toward luxury consumer goods, which in turn entails a progressive substitution of imported for local goods and a growing disparity between the consumption of those who succeed in migrating and those who don't. Remittances sent by low income emigrants for family support are the only mechanism with a stimulating effect on the demand for local goods of mediocre quality; all the other mechanisms stimulate the demand for high quality imported goods and services which have a negligible stimulating effect for the poorest segments of the population, rural or urban.
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