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December 2011

Global Economic Crisis and the Remittance-Unemployment Riddle

As a consequence of the global economic crisis, 2009 marked a hiccup in the trend of increasing remittance flows to developing countries. In most parts of the world, the growth rate of remittances was indeed negative. But what is striking is that there was an inverse relationship between remittances and unemployment. In other words, the greater the drop in remittances, the higher was the increase in the unemployment rate. In Moldova, for instance, remittances decreased by 36% in 2009, while the unemployment rate increased by 61%. By contrast, in Fiji, remittances increased by 24% and unemployment dropped by 7%.


The scatter plot below illustrates the relationship between changes in remittances and changes in unemployment, both measured as the annual growth rate (in percentage) between 2008 and 2009, for 29 developing countries. The x-axis represents changes in remittances and the y-axis the change in unemployment. The figure shows a negative correlation between the two variables.

Towards better governance for U.S. labor migration

Perhaps the toughest challenge faced by developed and developing countries alike is the governance of international labor migration. Some countries have developed useful mechanisms that foster economic growth and migrant integration into host societies. But in the United States, a well-informed, high level debate about how to improve employment-based migration management is conspicuously absent from the public discourse. Discussion in the media and debates in Congress typically focus narrowly on the concerns of employers who argue, for example, in favor of raising the numerical limits on two or three temporary visa categories, or those pushing for increased enforcement measures for irregular migrants.


The Economic Policy Institute’s new book, Value-Added Immigration: Lessons for the United States from Canada, Australia, and the United Kingdom, uses a comparative methodology to help fill this gap in the policy debate on labor migration in the United States. Authored by Ray Marshall, the U.S. Secretary of Labor under President Carter, it suggests how the United States could improve its own system based upon the best practices found in Australia, Canada, and the U.K. These three countries – while far from perfect – have evolved and adapted their migration governance to further a value-added strategy, i.e., one that seeks to improve productivity and innovation and fill labor shortages. They also do a better job of protecting the labor rights of foreign and native workers.

Worldwide Remittance Flows updated to $483 billion for 2011

We have updated the data on worldwide remittance flows -  including flows to developing countries and high income countries - to $483 billion in 2011. Of this, developing countries received $351 billion in 2011.  Worldwide remittance flows are expected to reach $593 billion in 2014.