Date of Award

Summer 2008

Document Type


Degree Name

Doctor of Philosophy (PhD)


International Studies

Committee Director

Steve Yetiv

Committee Member

Francis Adams

Committee Member

Vinod Agarwal


This dissertation constructs a framework for understanding the determinants of remittances. It develops the effects of multiple macro economic variables in one area in the Middle East on the remittances flows and the future development of (another Arab neighboring country) Egypt. The framework will explore the relationship between oil prices and remittances from oil based economies (mainly Saudi-Arabia, Kuwait and the Arab Emirates) to a labor exporting country (Egypt). It also highlights the impact of multiple variables affecting the flow of remittances from labor exporting Arab countries: (1) Prices of oil. (2) Oil revenues. (3) Differentials in deposit interest rate between the host and the home countries. (4) The income level in the host countries. (5) The income level in the home country. (6) Inflation rate in the home country. (7) Political instability in the area that might affect remittances flow from the host countries. These variables produce a three-outcome model, presented as three testable hypotheses. Workers' remittances in the Arab countries would be adversely affected by war in the Persian Gulf. Even though there is a tremendous increase in oil prices, remittances flow to Egypt from neighboring Arab countries will decrease. Political and economic factors circumscribe the future of demand for migrant labor (imported labor) and, consequently, growth of remittances in the labor-importing countries from labor-exporting countries.

This will be explained by developing a number of econometric models to test the effect of macro economic variables on the flow of remittances. Remittance is the dependent variable and the independent variables are price of oil and political instability. Other macro variables will be added to the model to be tested as independent variables: the interest rate in Egypt and host countries, the inflation rate in Egypt, and the income level of the host and the home countries.