1. International Technical Meeting on Measuring Migrant Remittances
Capturing information on remittances and other flows – a fact-finding in Europe
Violetta Damia
International Technical Meeting
on Measuring Migrant Remittances
January 2005

2. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

3. General considerations
Workers’ remittances:
2nd largest source of external finance for developing countries
size relevant to GDP vs. low volatility shown
conceptual framework given by IMF BoP Manual (5th edition)
Compensation for employment may be earned by persons residing in economies that differ from the economies in which they work on a temporary basis and also by persons residing in their own economies (e.g. international institutions may employ residents of the economies in which they are located)
Workers’ remittances
Migrants’ transfers are the more difficult to be captured

4. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

5. Definitions (BPM5)
Compensation of employees: the earnings of border, seasonal, and other workers paid by an employer resident in one economy to employees resident in other economies paid in kind and/or in cash – recorded under current account / income
Workers’ remittances: the remittances of funds to families abroad by residents (living in the host economy for 12 months or more)
recorded under current account / current transfers
Migrants’ transfers: the net worth of migrants at the time of migration (cash and goods transferred) –
recorded under capital account / capital transfers
Compensation for employment may be earned by persons residing in economies that differ from the economies in which they work on a temporary basis and also by persons residing in their own economies (e.g. international institutions may employ residents of the economies in which they are located)
Workers’ remittances
Migrants’ transfers are the more difficult to be captured

6. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

7. Fact-finding exercise (WG-ES)
EU Member States were requested to send available information on
Compensation of employees,
Workers remittances, and
Migrant transfers
with the objective to assess the magnitude of flows at the European level
data and metadata
if available, with geographical allocation
Compensation for employment may be earned by persons residing in economies that differ from the economies in which they work on a temporary basis and also by persons residing in their own economies (e.g. international institutions may employ residents of the economies in which they are located)
Workers’ remittances
Migrants’ transfers are the more difficult to be captured

8. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

9. Results: Meth. Issues (1)
Compensation of employees:
The information reported is
partly collected by settlement systems, tax and social security systems and the resident credit institutions
partly estimated based on the previous years, number of foreign workers, average wages, social contributions and census

10. Results: Meth. Issues (2)
Compensation of employees:
Main caveats:
high thresholds
diversity of methods to transfer money
1-year-rule : difficult to apply in practice
difficulty to differentiate between compensation of employees and workers’ remittances

11. Results: Meth. Issues (3)
Workers’ remittances:
The information reported is
mainly collected by settlement systems, by banks and post offices, through household surveys, from foreign exchange reports
difficult to estimate

12. Results: Meth. Issues (4)
Workers’ remittances:
Main caveats:
high thresholds
diversity of methods of money transfers
the presence of illegal foreign workers
1-year-rule : difficult to apply in practice

13. hence migrants transfers are recorded under workers’ remittances
Results: Meth. Issues (5)
Workers’ remittances:
The most difficult to measure
difficulty for most countries to monitor the flows separately
hence migrants transfers are recorded under workers’ remittances
the estimations are based on number of migrants and the average assets transferred

14. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

15. Results: Magnitude of flows (1)

16. Results: Magnitude of flows (2)
Compensation of employees:
mainly EU25: temporal, seasonal and border workers
American continent (especially the debit side)
Workers’ remittances:
mainly EU25
debit side: balanced distribution worldwide
Migrant transfers:
even distribution of low level flows: underestimation?

17. Overview General considerations Definitions (BPM5)
Fact-finding exercise
Results – Methodological issues
Results – Magnitude of flows
Main conclusions
Questions?

18. Main conclusions
need to fill the recording gaps so as to have a more concrete measurement
review thresholds applied
importance to follow harmonised methods to ensure comparability (based on BPM5)
further improvement of BPM5 in terms of definitions
encouragement for the utilisation of formal channels by reducing transfers’ costs
increase quality of information (underestimations)
development of estimation methods for capturing reality (e.g. refinement of households surveys)

19. Questions?