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Economic Crisis is affecting net migration rates in the European Union

Sonia Plaza's picture

Eurostat just released the latest estimates of the European Union demography numbers . According to the report, “EU gained only 1.4 million residents in 2009. (See article)
However, the population change has decreased from 2’046,029 in 2008 to 1’366,372 in 2009 (-33%). This is explained by a decrease in the natural population change and in the net migration. The decrease in natural population change has been due to a slight decrease in the crude birth rate and a constant crude death rate. Hence the major factor responsible for the slowing population growth is the decrease in net migration.

Due to the global recession, migration to the EU slowed down in 2009, for a net migration of  1,464,059 in 2008 to 857,186 in 2009 (a 40% decline). The reduction in migration flows is due to employment losses in countries of destination (especially Spain, Italy, UK) and to more restrictive immigration policies devised by European countries (e.g. UK points system, Italy prohibition on access to health service for undocumented migrants, Spain’s reduction in the number of positions available for immigrants).

A windfall from Wall Street – for remitters worldwide

Dilip Ratha's picture
   Photo: Istockphoto.com

The Wall Street Reform and Consumer Protection Act signed by President Obama last month has a little something for poor migrants who send money home – it includes the following:  

  • Remittance service providers (RSPs) will be required to disclose to remitters the equivalent amount that will be received in local currency by the beneficiary, the exchange rate used for the remittance transaction, the cost of the transaction, and the date of delivery to the recipient.
  • RSPs will need to provide consumers access to error-resolution mechanisms and remedies (including refunds). RSPs would need to provide the contact details of the relevant regulatory authority in the receipt at the time of the transfer. RSPs will also need to provide the information on pricing and error-resolution procedures in the language in which they advertize and promote their remittance services (e.g. Spanish to Mexican migrants, Amharic to Ethiopian migrants etc.).   
  • Remittances will be included in the strategy for financial literacy for low-income communities, as part of the US government’s Strategy for Assuring Financial Empowerment (SAFE). 
  • The Federal Reserve and Treasury will work to extend automatic clearinghouse (ACH) systems and other payment systems for remittances to foreign countries, with a focus on countries that receive significant remittance transfers from the US.  
  • A report will be prepared on the feasibility of using remittance history to improve credit scores and the legal and business model barriers to such credit scoring. 

    (An excellent summary of the Act is provided by Appleseed.)

What Drives the Price of Remittances?: New Evidence Using the Remittance Prices Worldwide Database

Maria Soledad Martinez Peria's picture

Remittances to developing countries reached U.S. $338 billion in 2008, more than twice the amount of official aid and over half of foreign direct investment flows.1 Numerous studies have shown that remittances can have a positive and significant impact on many aspects of countries’ economic development. Hence, monitoring the market for remittance transactions has become critical for understanding the development process in many low-income countries.

Remittance transactions are known to be expensive. The Remittance Prices Worldwide database collected by the World Bank Payment Systems Group shows that, as of the first quarter of 2009, the cost of remittances averaged close to 10 percent of the amount sent.2 At the same time, the data also reveal a wide dispersion in the price of remittances across corridors, ranging from 2.5 percent to 26 percent of the amount sent (see Figure 1 below the jump).

Migration News Roundup: July 23, 2010

Ani Silwal's picture

The Other Indian

Dilip Ratha's picture

“Name’s John. Hi!” he said.

“Thanks. Glad to meet you. My name is Dilip,” I replied as I put my carry-on bag on the seat and moved aside the pillow and the blanket to make space for myself. After a hectic week at Dakar, I was hoping the seat next to me would be empty. But it wasn’t.

John, my co-traveler, was short, brown, and middle-aged. There was a nondescript baseball hat on his head through which his pony tail hung behind him, long, more pepper than salt. He was wearing brown jeans and blue shirt. He had taken off his shoes and was wearing socks from the travel kit provided by the airline.

      Photo/istockphoto.com
“You going to DC?” I asked.

“Yes. And from Washington DC, to New Mexico.” He said he lived in the Navajo Nation just south of Colorado.

“Are you returning from the game in South Africa?” I asked.

“Yeah. The first time I saw a soccer game in my life. It was great. I’m a coal miner, in New Mexico. My company sent me to watch the World Cup. We were 150 of us from all over the world. We were there for 5 days.”

I opened the overhead locker to put my bag in before the take-off. “Is that your vuvuzela?” I asked.

“No. Probably belongs to the lady over there.”

“Football, or soccer, is the number one game in the world,” I said.

Why Ghana Should Win the World Cup … At Some Point

Çağlar Özden's picture
   Photo/istockphoto.com

Amidst a cacophony of vuvuzelas, expectations for the African teams in this World Cup had never been higher. For the first time the tournament was held on African soil and many African teams had famous coaches - Sven Goran Erikson for Cote d’Iviore being one example. Most importantly, there have never been so many African players signed to the top European clubs in the world; perhaps none more famously so than Samuel Eto’o of Inter Milan or Didier Drogba of Chelsea. And yet, the African teams were knocked out of the competition in the group stages, one by one. That is, all except Ghana, the team on which all African hopes now rested.

Migration News Roundup: June 18, 2010

Ani Silwal's picture

Almost a third of Indians, or over 300 million people, are migrants

Sanket Mohapatra's picture
  Photo © Simone D. McCourtie / World Bank

India’s Ministry of Statistics and Programme Implementation has just released the “Migration in India 2007-08” report (June 2010) based on the 64th round of the National Sample Survey (NSS). This nationally representative survey includes 125,578 households (79,091 households in rural areas and 46,487 households in urban areas) which together have 572,254 individuals. The report has many interesting findings on internal and international migration and remittances in India, which you can read in the press release. I have highlighted a few that I found interesting:

Almost a third of Indians, or over 300 million people, are migrants. 28.5 percent of Indians (some 325 million people, out of a population of 1.14 billion in 2008) are migrants, according to the survey. 35 percent of people in urban areas and 26 percent of people in rural areas have moved from their place of usual residence.However, migration in India is largely confined to within the same state. 72 percent of migrant households in urban areas and 78 percent in rural areas have migrated within the same state.

Income inequalities and the rules of the game

Elina Scheja's picture

Yesterday I attended a seminar organized by the Growth Commission on “Ingredients for Successful Growth Strategies – Equity, Globalization and Leadership” chaired by Otaviano Canuto. As a part of the opening remarks Nobel laureate Michael Spence made it clear that inclusiveness is an integral part of any growth strategy and a necessity for achieving high levels of growth. In (on average) middle income countries where income inequalities are pronounced one finds two economies operating simultaneously:  the upper class resembles OECD economies characterized by low levels of growth, while the poorer majority live in a low-income economy with little resources to grow. As a result, the economy as a whole grows at a suboptimal level until these two groups can be remerged and the middle-class is re-established.

Migration and Remittances in Inclusive Growth Analytics

Elina Scheja's picture

Even though migration brings about large overall gains globally, whether or not it has a positive impact on growth in a given country has caused more controversy in the empirical literature. The answer depends on the country specific circumstances, and the type of the study. Often the analysis is limited to one specific aspect of migration ignoring the other, possibly more influential indirect channels through which migration impacts growth dynamics. A holistic context specific analysis is needed to inform the policy choices that set up the most favorable conditions ensuring that migration dynamics contribute to an inclusive growth process.

One of the most influential current frameworks for context-specific growth analysis has been the Growth Diagnostics by Hausmann, Rodrik and Velasco. This framework has been further adjusted for inclusive growth diagnostics by Sida and the World Bank. The main difference between traditional and poverty reducing growth diagnostics is that the inclusive analysis takes the individual rather than the firm or the economy at large as the analytical starting point, and argues that the way for sustainable and inclusive growth goes through productive employment. Finding ways to enhance individuals’ ability to participate in, contribute to, and benefit from growth through productive self- or wage employment becomes the focus of the analysis.

Immigration a major election issue on both sides of the Atlantic

Sonia Plaza's picture

Immigration reforms are the focus in the UK  elections and in the USA Senate elections for this year. Both countries are yet to come to grips with the need to develop consistent policy frameworks in which immigrants can effectively and productively utilize their skills, knowledge, and previous work experience. Both countries are trying to identify measures on how to better deal with undocumented migrants and how to devise laws for low-skilled workers and for high-skilled workers.

In the UK, prime ministerial candidates have proposed the following approaches to undocumented migrants: 1) Gordon Brown’s proposal is to ban unskilled workers from outside Europe and cut the numbers of semi-skilled and skilled workers to enter into UK; 2) David Cameron proposes that “new countries that join the European Union should have transitional controls so not everyone can come at once. Regarding immigration from outside the European Union, there needs to be a cap”; and 3) Nick Clegg puts forward a proposal for "earned citizenship" for those who have lived illegally in Britain for at least 10 years, who speak English, who want to pay taxes and who want to play by the rules. (Boris Johnson, the Mayor of London, is promoting amnesty for undocumented workers.)

Is Russia the second-largest sender of remittances? Or is it Saudi Arabia?

Ani Silwal's picture

Saudi Arabia was the second largest sender of remittances (after the United States) from 1988 to 2006. In 2007 and 2008, it was displaced by Russia as the second largest sender of remittances (figure 1). Flows from Russia have increased rapidly in recent years, reaching $26.1 billions in 2008. However, this rapid growth was interrupted in 2009, when remittance outflows fell by 29% to $18.6 billions in 2009. We don't have 2009 outflows data for Saudi Arabia yet but based on inflows data from Bangladesh, Pakistan, and the Philippines, Saudi Arabia's remittances outflows have not fallen much. Saudi Arabia was likely the second largest sender of remittances in 2009.

There are two possible explanations for why remittances from Saudi Arabia have been more stable than those from Russia (see Migration and Development Brief 12 for details). First, oil prices are more closely related to economic activity (thus, better employment prospects for migrants) in Russia than in Saudi Arabia. As major oil-exporters, both countries benefited from the surge in oil prices in the last few years. But only in Russia did remittance outflows move closely with oil prices (figure 2). This was not the case in Saudi Arabia, which has had ambitious development plans for a while and an aggressive counter-cyclical fiscal policy. Second, Russia’s borders with its neighbors are much more porous than those of Saudi Arabia, which enforces immigration quotas strictly. Russia’s porous borders have allowed migrants from neighboring countries to move in an out in response to changes in labor demand.

Weekly News Roundup: April 30, 2010

Ani Silwal's picture

Migration and Remittances: Weekly News Roundup (April  30, 2010)

US: Democrats Outline Plans for Immigration, April 30, 2010
Lebanon: Liquidity from remittances helped Lebanon weather crisis, April 29, 2010
Mexico: Remittances down 12 pct in 1st quarter, April 28, 2010
Liberia: Government Launches Diaspora Road Show, April 27, 2010
Nepal: Outflow of migrant labourers posts sound growth, April 26, 2010

Weekly News Roundup: April 23, 2010

Ani Silwal's picture

Migration and Remittances: Weekly News Roundup (April  23, 2010)


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