The United States is perhaps the largest destination country for international migrants, and is by far the largest source country for international remittances (see our Factbook and a recent CBO report on remittances). The US Bureau of Economic Analysis reported that outward remittance flows from the US amounted to $51.6 billion in 2010 (see table 1). So far the BEA has published remittance data for the first three quarters of 2011. What could be the estimate for the fourth quarter 2011 and by implication the annual figure for 2011?
* Authors’ estimate based on past seasonal pattern shown in figure below.
Recent quarterly data published by the US Bureau of Economic Analysis exhibit a strong seasonal pattern in remittance outflows (see figure). This pattern – low during summer and high during Christmas - has held for the first three quarters of 2011. It is likely that the pattern would continue in Q4 2011, in which case outward remittance flows from the US would reach $13.2 billion for the last quarter of 2011 and $51.6 billion for the year 2011, the same as in 2010.
Fig. 1: Quarterly remittance outflows from the US
A scenario of zero growth since 2009 in outward remittance flows from the US, however, is not consistent with the trend in overall remittance flows reported by Mexico and other recipient countries. One would expect remittance outflows from the US to be strongly correlated with inflows in recipient countries. Indeed the fall in outward remittances from the US in 2009 (-5.1%) was close to that in total remittance inflows in developing countries (see here). However, 2010 onwards inward flows in developing countries have resumed growth, but US data doesn’t reflect this. Does this suggest that remittance outflows in the US are not properly reflected in the official data? That could be the case, for example, if official data fail to capture informal flows.
One possibility for the US and other major senders of remittances to improve their outflows data is to look at what other countries are reporting as receipts. A theoretical exercise using a bilateral migration data reported by various countries, reported in our bilateral remittance matrix – suggests that outward remittance flows from the US could be as high as $110.8 billion, more than double the official data. Is this the correct amount? We don’t really know, but the issue certainly deserves more attention.
One interesting difference between the CBO data and the World Bank data is the diversity of remittance outflows from the US. In the CBO study, remittances to Mexico dwarf remittances to other countries such as China and India (Table 2). Mexico is still the largest recipient according to our bilateral remittance matrix, but China, India, the Philippines and other developing countries also show up as large recipients.
Table 2. Destination of outward remittance flows from the US
Migrants’ Remittances and Related Economic Flows, Congressional Budget Office (CBO), February 2011, Migration and Remittances Factbook 2011 (World Bank)
Note: Data from Exhibit 4 of CBO study was taken for 2009. $16 billion sent to international organizations was deducted from the outflows. Data from the World Bank is for 2010.