Improving the Measurement of International Remittances Neil Fantom Development Data Group World Bank
Statistics on international remittances Main source is the Balance of Payments statistics Established reporting system and conceptual framework managed by IMF Typically, data are collected by Central Banks or National Statistical Offices Published annually in Balance of Payments Statistics Yearbook - some countries compile and publish monthly or quarterly data
Some of the data issues Currently, users have to calculate remittances from several BoP statistics aggregates Quality problems: some users (e.g. World Bank) adjust the data for missing or implausible data Some countries may not give remittances data components high priority within BoP statistics framework Bilateral flow data are not currently collected by IMF, although some countries do publish data
Improvements have been made G8 Summit Sea Island in 2005 called for data improvements A careful international effort has resulted in: New definitions and concepts for remittances agreed in the latest (sixth) revision of the BoP Manual A new compilation guide, equally useful for data compilers and for users Other regional initiatives have helped countries improve estimates CEMLA program for Latin America IMF regional workshops in Thailand, Tunisia, Lebanon, Singapore
New definitions Work (led by UN Statistics Division) resulted in four aggregates 1. Personal transfers (narrowest) 2. Personal remittances 3. Total remittances 4. Total remittances and transfers to NPISHs (broadest)
Relationships Personal transfers + net compensation of employees and capital transfers between households = Personal remittances + social benefits = Total remittances + current and capital transfers to NPISHs = Total remittances and transfers to NPISH
What happens to the old definitions? Workers remittances Supplementary item (component of personal transfers) Compensation of employees Standard item in current account Migrants transfers: no longer available
Compilation guide Published by the IMF, core drafting by the Luxembourg Group A voluntary ad-hoc working party of international agencies and data compilers from countries Met three times: Luxembourg, Frankfurt, Brasilia
Albania Brazil Centre for Latin American Monetary Studies Eurostat Germany India International Monetary Fund Italy Japan Lebanon Moldova Spain Portugal Organization for Economic Cooperation and Development Philippines United States United Kingdom World Bank
Reported Remittances in BoP Statistics (Worker s Remittances + Compensation of Employees, $bn) 400 350 300 Global receipts 250 200 150 Global payments 100 50 0 2001 2002 2003 2004 2005 2006 2007
Discrepancy (as percentage of total receipts) 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007
Next steps for the BoP Experts meeting in June at World Bank agreed to Establish a new ad-hoc working group to continue to work on data improvements Develop electronic forum for sharing bilateral data and metadata among data providers, particularly to assess data asymmetries IMF support for compilers through annual regional workshops Ljubljana (Nov 2009); Abu Dhabi (Nov 2010) Country data compilers will need to adopt new definitions Nature of remittances means that compilation of accurate estimates will remain challenging
Data from Household Surveys Attractive data source for researchers Allows comparison or remittances with other household variables (e.g. poverty, health, education) And surveyor has control over questions asked (migration, remittances, transaction costs) But not easy to get good data Income-related variable impacts on quality of response Sampling difficulties; respondents may be rare in general population, requiring special techniques Surveys of remittance receiving countries more common than surveys in remittance sending countries World Bank sponsors various household survey programs, including one specifically on migration/remittances in Africa
Suitland Group Set up by Conference of European Statisticians to work on improving migration and remittances data collected through household surveys Review of Methodologies Used to Estimate Emigration Repository of Household Survey Questionnaires on Migration Linking Registers and Other Sources of Administrative Data with Surveys Questionnaire Module on Migration and Remittances Categories, Definitions, and the Importance of Hard-to-Count Populations Data Quality Issues Sampling Frame and Sample Design Issues
Case study: adding questions to a survey in the United States United States Current Population Survey administered by US Census Bureau Migration and remittances questions added to one round of US labor force survey (known as the Current Population Survey) in 2008 Remittance questions: frequency and average amounts over previous 12 months 70,000 households in sample Cost of additional questions estimated to be between $400,000- $850,000 Overall, remittance questions seemed to work, for example: 5% of households sent remittances 87% response rate for average amount question asked to sending households 27% of foreign-born reported sending remittances
Some final thoughts BoP: definitions have improved, and practical guidance for compilers and users is available Key issues in some countries are limited resources and capacity, or low priority given to remittances data in BoP Household surveys: important data source Adding questions to regular, large-scale nationally representative household surveys can work, but at a cost