1. BEA’s Measures of Workers’ Remittances and Transfers through Charitable Organizations Michael Mann Chief, Current Account Services Branch Balance of Payments Division Bureau of Economic Analysis (BEA)

2. 2 www.bea.gov BEA’s Measures of Workers’ Remittances and Transfers through Charitable Organizations Workers’ Remittances – a numerical example of BEA’s estimation methodology and source data Transfers through charitable organizations - mostly based on BEA’s BE-40 Survey

3. 3 www.bea.gov Workers’ Remittances BEA estimates workers’ remittances by multiplying three factors: –Stock of foreign-born population (S) –Mean family income (M) –Propensity to remit reflecting the average proportion of income remitted (P)

4. 4 www.bea.gov Factors Arranged by the Following Variables: Family Type –Foreign born head of household (FB HH) –Native born head of household, foreign born spouse (NB HH, FB S) –foreign born individuals (IND) Length of Residency in the United States – 5 year intervals –1-5, 6-10, 11-15, 16-20, 21-25, 25-30, 30+ years

5. 5 www.bea.gov Step 1. Determine the stock of the foreign-born population in the United States

6. 6 www.bea.gov Step 2. Determine the mean family income of the foreign-born population in the United States

7. 7 www.bea.gov Step 3. Determine the propensity to remit for the foreign-born population in the United States

8. 8 www.bea.gov Step 4. Estimate remittances per capita by multiplying average propensity to remit by mean family income

9. 9 www.bea.gov Step 5. Estimate total remittances by multiplying remittances per capita by the foreign born population in the U.S.

10. 10 www.bea.gov Transfers through Charitable Organizations BEA collects this information by surveying charitable organizations Captures transfers by foreign-born and U.S.-born population Captures transfers by foreign born to residents of their home country other than their family (e.g. some Tsunami aid)

11. 11 www.bea.gov Questions