The impact of remittances on household spending has been a debatable issue. A I arge body of literature has been concerned about remittances in Egypt as well as other developing countries. However, there are conflicting views regarding the way remittances are circulated. Some believe that remittances negatively the economy of the recipient country by increasing personal consumption. On the other hand, others supported that remittances enhance productive asset accumulations and increased savings and investments. This thesis uses 1997 Egypt Integrated Household Survey (EIHS) to empirically assess whether remittances change household spending. For understanding of the way remittances affect spending decision, this thesis identifies the characteristics of migrant and remittances recipient households. Opposite to the orthodox belief, migrants are most likely among the least educated and the poorest segments of society. This is due to limited opportunities at home and the demand for low skills construction laborers and farmers abroad. This research concludes that remittances do not change personal consumption such as food, clothes and ceremonies because recipients regard remittances as a temporary stream of income that should be allocated for assets accumulation with longer-term nature. Given the limited alternatives recipients prefer to spend on improving quality of dwellings and durable goods, both of which are a store of value, and raise living standards.
MA in Economics
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EL Sherbiny, D.
(2002).Do remittances change household spending? [Thesis, the American University in Cairo]. AUC Knowledge Fountain.
EL Sherbiny, Dalia Hammam. Do remittances change household spending?. 2002. American University in Cairo, Thesis. AUC Knowledge Fountain.
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