capturing information on remittances and other flows – a fact-finding in europe violetta damia 24...

Capturing information on remittances and other

flows – a fact-finding in Europe

Violetta Damia

24 - 25 January 2005

International Technical Meeting on Measuring Migrant Remittances

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

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)

General considerations

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

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

Definitions (BPM5)

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

EU Member States were requested to send available information on

1. Compensation of employees,

2. Workers remittances, and

3. Migrant transfers

with the objective to assess the magnitude of flows at the European level

Fact-finding exercise (WG-ES)

data and metadata

if available, with geographical allocation

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

Compensation of employees:

The information reported is

1. partly collected by settlement systems, tax and social security systems and the resident credit institutions

2. partly estimated based on the previous years, number of foreign workers, average wages, social contributions and census

Results: Meth. Issues (1)

Compensation of employees:

Main caveats:

1. high thresholds

2. diversity of methods to transfer money

3. 1-year-rule : difficult to apply in practice

difficulty to differentiate between compensation of employees and workers’ remittances

Results: Meth. Issues (2)

Workers’ remittances:

The information reported is

1. mainly collected by settlement systems, by banks and post offices, through household surveys, from foreign exchange reports

2. difficult to estimate

Results: Meth. Issues (3)

Workers’ remittances:

Main caveats:

1. high thresholds

2. diversity of methods of money transfers

3. the presence of illegal foreign workers

4. 1-year-rule : difficult to apply in practice

Results: Meth. Issues (4)

Migrant transfers:

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

Results: Meth. Issues (5)

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

Results: Magnitude of flows (1)

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?

General considerations

Definitions (BPM5)

Fact-finding exercise

Results – Methodological issues

Results – Magnitude of flows

Main conclusions

Questions?

Overview

Main conclusionsneed 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)

Questions?