Archive:Migrant remittance and cross-border or seasonal compensation transfer statistics

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This article presents statistics related to workers' remittances and compensation of employees in the European Union (EU). International migration receives growing attention, as it has large implications for growth and welfare in both countries of origin and destination. Eurostat regularly publishes data related to workers' remittances and compensation of employees. Workers' remittances are mainly related to migrants who tend to stay for a long time, whereas compensation of employees is linked to crossborder and seasonal workers.

After a temporary decrease in 2009, compensation of employees is back on the increase in 2010 at EUR 46.9 bn. Outflows of workers' remittances also rose to 31.2 bn, compared with 30.4 bn in 2009 (+3 %). Despite the growing trend, total outflows of remittances and compensation of employees in the EU at 78.1 bn in 2010 remained 1 % below their 2008 record level of EUR 79.2 bn.

Figure 1: Workers' remittances total outflows from EU-27 Member States, in billion euro - Source: Eurostat (bop_remit)

Table 1: Foreign citizens in the EU, 2010 - Source: Eurostat (migr_pop1ctz)

Table 2: Outflows of workers' remittances from EU Member States, in million euro - Source: Eurostat (bop_remit)

Table 3: Major remittance corridors – outflows, in million euro - Source: Eurostat (bop_remit)

Table 4: Major remittance corridors – inflows, in million euro - Source: Eurostat (bop_remit)

Table 5: Workers' remittance inflows into EU27, in million euro - Source: Eurostat (bop_remit)

Figure 2: Current account and workers’ remittances balances, in 2010 (in billion euro) - Source: Eurostat (bop_q_c)

Table 6: Net workers' remittances (inflows minus outflows), in million euro - Source: Eurostat (bop_remit)

Table 7: Compensation of employees' outflows from the EU, in billion euro - Source: Eurostat (bop_remit)

Table 8: Compensation of employees outflows from EU Member States, in million euro - Source: Eurostat (bop_remit)

Table 9: Major compensation of employees corridors – outflows, in million euro - Source: Eurostat (bop_remit)

Main statistical findings

Remittance outflows from the EU grow by 3 % in 2010

In 2010, total outflows of workers' remittances from the EU reached 31.2 bn euro, an increase of 3 % compared to the previous year and 61 % compared to 2004. Despite the rise in 2010, total EU-27 outflows remain 5 % under their highest levels of 32.8 bn in 2008. Remittance outflows are mainly directed towards non-EU countries.

In the wake of the financial crisis, the share of extra-EU remittances remained stable: they were around 72 % of the total in 2008, 2009 and 2010. During the downturn in the global economy, extra-EU remittance outflows declined more modestly (-7 % in 2009) than intra-EU outflows (-9 % in 2009). Their recovery in 2010 was however also more timid: +1 % for extra-EU vs.+6 % for intra-EU.

In 2010, remittance outflows remained close to 2009 levels in the majority of Member States. The highest increase was recorded in Poland, where it continued also in the first two quarters of 2011.

EU-27 top remitting countries: Spain, Italy, Germany, France and the Netherlands

As in previous years, the outflow of workers' remittances in 2010 was highest in Spain at 7.2 bn euro or 23 % of total EU-27 remittances, Italy (6.6 bn or 21 %), Germany (3.0 bn or 10 %), France (2.9 bn or 9 %), and the Netherlands (1.5 bn or 5 %). These five Member States accounted for nearly 21.2 billion euro, or 68 % of total EU remittances (Table 2). This might not be surprising given that 66 % of all the 32.5 million foreigners in the EU resided in these five Member States in 2010 (Table 1).

Spain is the largest sender of remittances to non-EU countries. Spanish outflows of remittances to non EU countries were 89 % of their total in 2004, but they fell to 82 % in 2009. In the other big remitters - Italy, France and Germany remittances to non-EU countries showed a stable increase from 77 %, 54 % and 63 % of total outflows in 2004 to 81 %, 72 % and 67 %, respectively, of the total in 2010.

In Ireland (81 %), Luxembourg (80 %), Slovakia and Estonia (both 67 %) the lion's share of remittance outflows in 2010 was attributed to intra-EU flows, i.e. flows to other Member States.

Major remittance corridors – outflows

In 2010 as in the previous surveyed years, the main recipients of remittances were outside the European Union: China, Colombia and Ecuador.

Table 3 presents the principal corridors of remittance outflows in 2008 – 2010 amongst the hundred possible destination countries for workers` remittances. These corridors tend to remain fairly stable over time.

In 2010, remittance flows from Italy to China account for the largest corridor, followed by flows from Spain to Colombia and Ecuador. Other important corridors include from Italy towards Romania and Philippines; from Germany to Turkey; from Spain to Bolivia; from France towards Morocco and Portugal; and from Greece to Albania.

Inflows of remittances are important in certain EU Member States

Some of the EU Member States are also major recipients of workers' remittances. Total inflows had shown a steady increase of 88 % from 2004 (11.7 bn euro) to 2008 (22.7 bn). As for remittance outflows, this was followed by a temporary drop in 2009 (-18 %). The trend was reversed in 2010 when EU-27 remittance inflows recorded a 2 % increase reaching 18.9 bn, compared with 18.6 bn in 2009. Remittance inflows come mainly from other Member States: in both 2010 and 2009, 65 % of the inflows were intra-EU, 5 % down compared to 2008. Showing a consistent trend in 2008, 2009 and 2010, amongst the major recipients of remittances are notably Spain, Poland, Portugal and Romania. These four countries received over half of the remittance flows into EU-27. An overview of remittances inflows by country from 2008 until 2010 is presented on page 4 (Table 5). Table 4 presents the major corridors of remittance inflows to EU Member States: to Spain from Switzerland, the United Kingdom and Italy, to Romania from Italy, Spain and the United States, to Portugal from France and Switzerland, to Poland from the United Kingdom and to Greece from the United States.

Without remittances the current account deficit of Bulgaria would be 158 % higher

In the receiving country, remittances support national household consumption, but they also represent an important source of foreign exchange. In Bulgaria, Romania, Poland and Portugal net remittances make a substantial contribution to balancing a negative current account (see Figure 1). Without remittances, the current account deficit recorded by Bulgaria and Romania in 2010 would have been 158% and 45% higher, respectively.

The net flows of workers' remittances

In 2010, as in the previous year, the EU as a whole remitted more than three times the amount it received from third countries (22.3 bn euro sent compared to 6.7 bn received). Most of the EU Member States are net senders of remittances and post negative balances, which are measured as inflows minus outflows. In 2010 the exceptions to this rule were Poland, Romania, Portugal, Bulgaria, Lithuania, Sweden, Slovakia and Estonia, listed in order of decreasing importance of the net remittances received.

Compensation of employees outflows increase by 2% in 2010

Compensation of employees mainly refers to cross-border and seasonal workers who usually come from neighbouring countries: the extra-EU flows are therefore negligible compared to intra- EU flows. The total outflow of compensation of employees from EU-27 in 2010 amounted to 46.9 bn euro, of which 80 % was sent to other Member States. Compensation of employees' outflows have been increasing steadily since 2004. This trend was interrupted in 2009 (-1 %) mainly due to a drop in extra-EU outflows (-9 %), but 2010 brought again an increase in values (+2 %) for both intra- and extra-EU compensation of employees outflows.

8.7 bn euro of compensation of employees from Germany

Germany, Luxembourg and the Netherlands were the countries with the largest outflows of compensation of employees in 2010. Together, these three Member States alone accounted for 47 % of the EU-27 total compensation of employees outflows. These figures reflect the significant number of border workers from neighbouring countries employed in these three countries. Significant outflows of compensation of employees were also recorded in Italy, Belgium, Denmark and the United Kingdom (Table 8). While in the majority of Member States the outflows are primarily going to other EU countries, in Poland (1.1 bn euro, 96 %), the Czech Republic (0.9 bn, 85 %) and Italy (1.9 bn, 71 %) they are directed towards mainly non-EU countries.

Main corridor of compensation of employees: Luxembourg - France

Table 9 shows the main corridors of compensation of employees' outflows. The only important corridor that does not involve neighbouring countries is the one between Germany and Romania, which probably reflects the significant numbers of seasonal workers. The salaries that the European Institutions pay to their employees are also recorded among the flows of compensation of employees; flows of salaries from the European Institutions are high in Belgium and Luxembourg as the Institutions are not considered residents in the countries where they are located.

Data sources and availability

The data on remittances used for this article are those published in the dedicated table in Eurostat`s database (domain Balance of Payments) in December 2011 based on the data reported by Member States at the end of September 2011.

The on-line table dedicated to remittances contains annual data related to remittances and compensation of employees for the years 1999-2010 with detail by partner, as reported by the EU Member States. The length of the published time-series and the geographical breakdown is different for each Member State. Where annual data were not available, annualised quarterly data were used. The EU-27 aggregate was estimated only for the period 2004A-2010A.The EU-27 aggregate takes into account confidential data and estimates for missing Member States.

Quarterly data related to remittances and compensation of employees are also collected regularly by Eurostat as part of the quarterly balance of payments; these data have less geographical detail, but are reported after 90 days (and disseminated after 110 days) following the reference period.

The World Bank produces and publishes matrices covering bilateral remittances between 215 countries. The bilateral remittances are estimated by the World Bank mainly using migrant stocks.

Due to rounding, the figures shown in the tables included in this paper may not add up to an exact figure. All disseminated figures may be subject to revisions.

Context

The data used for this article are the main results of a new annual survey introduced by Eurostat in 2009. The data were compiled by the National Central Banks or by the National Statistical Offices of the Member States as part of their Balance of Payment Statistics.

Remittances vary widely in their importance to national economies, which may result in differences in the emphasis given by national statisticians to measuring and monitoring them. For net sending nations, which tend to be those with the largest and most advanced economies, the amounts transferred may be large in absolute terms, but their importance relative to total economic activity generally is small. For net receiving nations, the situation is often the reverse.

Data on remittances are very difficult to compile, because of the small size of individual transactions, the variety of channels - sometimes informal or illegal - that can be used, and the sometimes uncertain status of those who carry out these transactions. Individual remittance transactions often fall below reporting thresholds for banks and other financial institutions. Money transfer operators, who are the preferred vehicle of transfer for many migrants, may only settle net payments though the banking system, making it difficult to identify the underlying gross receipts and payments. In addition, remittance transactions are sometimes conducted outside the formal financial system, such as through hand-carry or through unlicensed transfer businesses, both of which usually bypass formal reporting systems. Capturing data via household surveys may also be difficult, especially for the migrant population that have no legal status. Illegal residents are more likely to use informal channels and are often difficult to contact or survey.

Faced with these numerous and varied difficulties in data collection, some countries have chosen to estimate remittances using econometric or demographic models. But models' results depend on the reliability of the source data and on assumptions about the relationships among variables; their output is therefore difficult to verify.

Different methods can also be used for compiling data related to compensation of employees. Here administrative data such as income tax and work permits might be available (in the sending country). However, illegal work does not show up in tax records. It may also be fairly difficult to assess the length of residence of the sender, which is a key factor for distinguishing between workers` remittances and compensation of employees.

The difficulties in the measurement of remittances can be illustrated by the level of the asymmetries, i.e. the discrepancy between intra-EU inflows (credits) and the mirror outflows (debits). Although in reality, and by any definition, the amounts sent and received should be the same, reported Intra-EU outflows in 2010, for example, at 8.9 Euro billion, were 28 % lower than reported Intra-EU inflows, at 12.3 Euro billion. Such differences suggest that statistics on remittances involve serious problems of coverage. Users need to bear this in mind when analyzing the data.

Data related to foreign citizens used for this publication refer to the resident population of a specific country that does not have the citizenship of that country. "Foreigners" could however also be measured looking at the country of birth of the resident population. Both concepts are useful for measuring the stock of immigrants. These data are part of the annual statistics on international migration, supplied by the Member States to Eurostat according to the requirements of Regulation 862/2007 (OJ L199, 31/07/2007). The figures may include or not illegal migrants, depending on the country.

See also

• Balance of payment statistics
• Balance of payments and international investment position manual (BPM6)

Further Eurostat information

Publications

• EU remittances back on the increase in 2010 - Statistics in focus 4/2012

Main tables

• Balance of payments, see:

Balance of payments - International transactions (t_bop)

Database

• Balance of payments, see:

Balance of payments - International transactions (bop)

Workers' remittances and compensation of employees (bop_remit)

Dedicated section

• Balance of payments

Other information

• Regulation 184/2005 of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment
• Regulation 862/2007 of 11 July 2007 on Community statistics on migration and international protection

External links

• International Monetary Fund

Balance of Payments Manual, 5th edition, IMF 1993

Balance of Payments Manual, 6th edition, IMF 2008

International Monetary Fund

• World Bank

World Bank