ESV - 13 Then the Lord said to Abram, "Know for certain that your offspring will be sojourners in a land that is not theirs and will be servants there, and they will be afflicted for four hundred years.
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This is one of my favorite verses that demonstrate God's infinite wisdom in writing His redemptive history. In addition to the excellent answer provided by Michael, it was God's way of setting up the stage for redemption of His people from slavery through the Ten Plagues culminating in Passover which is the foreshadowing of the coming Lamb of God. Without the suffering of slavery, they would not feel the need for a savior, a redeemer, the ultimate lamb. The Exodus story is the dramatization of our salvation played out in history. We can see it being referred to repeatedly throughout the Bible. As for the question on the length of 400 years, it seems to be one of God's numbers of completion in related to time: 400 years of slavery, 400 years of Judges, 400 years of kingdom, 400 years of intertestamental period before Christ. God also reveals in verse 16 "And they shall come back here in the fourth generation, for the iniquity of the Amorites is not yet complete." This implicates that there is certain level of sin God will bear before He judges.
God had several distinct purposes for the Israelites’ enslavement in Egypt, for God causes all things to work together for good, to those who love him and are called according to his purpose (Rom 8:28). First, He was biding time for the fulfillment of the iniquity of the Amorites to be fulfilled (Gen 15:16). Second, it was in suffering that they learned obedience, for God scourges all sons he receives (Heb 12:5-11, Ex 3:27, 4:31, Rom 5:3-5, Jam 1:2-4). Third, they were subject to mankind’s unjust laws, in order to see the superior wisdom of God, when he handed down his Torah to them. Fourth, it was in their miraculous deliverance that God demonstrated to the entire world, the power and sovereignty of the one true God, and the fact his hand was upon them. Finally there is the fact Joseph took the grain the Egyptians brought to Pharaoh during the years of plenty, stored it away, and then made them slaves of Pharaoh in order to redeem it. This he did despite the fact his brothers had made him a slave. Some say this brought slavery upon the Israelites in return, as a sowing and reaping “cause and effect.” It is important to note the idea that the Israelites were actually slaves in Egypt 400 years is not without controversy. Not only does 4 generations not equal 400 years, Gal 3:17 tells us the Law of Moses came 430 years after Abraham's covenant with God, and Moses stated in Ex 12:40-41, that the children of Israel spent 430 years in Egypt. Since a minimum of 215 years passed between the Abrahamic covenant and the time the Israelites entered Egypt, this would equal 645 years. However, applying simple addition to the years provided in I Chr; 6:1; 23:6-13, and Ex 6:16-20, proves this is impossible. This leaves two camps. The first holds that Exodus 12:40-41 requires the Israelites to actually have lived 430 years in Egypt. The 2nd, led by Dr. Rohl in his book, “Pharaohs and Kings: a Biblical Quest,” states "there is clear evidence that the period of the sojourn was no more than 215 years (1995, p. 329), as shown by simply allowing for the fact that the 430 years includes the whole time from the calling of Abraham to the Israelites departure from Egypt. This is confirmed by recent archaeological finds in Egypt, as well as the oldest texts, which include within Ex12:40 the words, "and their fathers,” and “in the land of Canaan." Thus, the complete verse reads: “Now the sojourning of the children of Israel and of their fathers, which they sojourned in the land of Canaan and in the land of Egypt was 430 years.” Adam Clarke, in his Pentateuch commentary, concluded: “...the Samaritan Pentateuch, by preserving the two passages… has rescued this passage from all obscurity and contradiction.… the Alexandrian copy of the Septuagint must also be allowed to be one of the most authentic as well as most ancient copies of this version which we possess." Source: https://www.apologeticspress.org/apcontent.aspx?category=6&article=796 For the alternative argument, see: https://josephandisraelinegypt.wordpress.com/how-long-did-the-israelites-sojourn-in-egypt/
In addition to all of the excellent reasons outlined by previous writers, can I suggest that, had Jacob's family not dwelled together in Egypt for several generations, they would not have become a "whole" people. As a nomadic tribe, they would have likely been split apart by marrying, and by moving about, seeking better pasture and water, perhaps even coming into conflict with one another. By having them dwell together in Egypt, in God's own perfect timing, when they were a "people" instead of numerous nomadic tribes, they were brought out of Egypt, and eventually into the land of Canaan.
In addition to all the answers given, I believe one reason why the children of Israel had to be in slavery for 400 years was as a result of Abraham's mistake in Gen. 12 vs 10. He decided to go down to Egypt on his own without making inquiry from God, and this was where the Egyptian maid, Hagar was given to Him (Gen 12 vs 16.) God, knowing the end from the beginning, knew that Abraham would go contrary to God's promises of a child in Gen chapter 16, where he went in to Hagar and the result was Ishmael. My view is that there are wages for every sin committed, and the reason Israel was also in captivity, in addition to all the answers already given, was because Abraham's sin had to be punished due to his own mistake by going down to Egypt.
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