Cadmus - EUI Research Repository (European University Institute) · 2005 · 12 citations · 0 references
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The paper studies tangible and non-tangible flows generated by Egyptian migration.Questions discussed revolve around the following: How do flows of finance and flows of skills interact with each other?Which role does social capital play in making the net outcome a positive or a negative one?What are the policy recommendations to for a sustainability of migration-induced development?Egypt is witnessing an important brain drain as many other developing countries.Permanent migration to the West is the main source of brain drain, as it has always been the migration of the better educated.Brain drain is explained by the low private rate of return to education in Egypt, and by limited employment opportunities in the formal private sector and shrinking employment opportunities in the government sector.Remittances to Egypt have been amongst the highest in the world peaking at $6.1 billion in the early 1990s and are the major source of foreign currency.However the value of remittances tended to decline during the last decade as percentage of GDP from 6.8 per cent to 4.4 percent as well as percentage of total investments from 40.8 percent to 25.8 percent.Once-abroad migrant households spent most of their remittance earnings on housing.Migration is regarded as an important mechanism for poverty alleviation and job creation.It has also a positive impact on services such as educational and medical services.Social capital is found to be lower for households who receive remittances than for those who do not.Because these households are better off, their involvement with the community is not so much needed.