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Aleksandra Babii, Ms. Alina Carare, Dmitry Vasilyev, and Mr. Yorbol Yakhshilikov
Traditional models relying on standard variables like the U.S. Hispanic unemployment rate fared well in explaining remittances to CAPDR and Mexico during the pre-pandemic period. However, they fail to predict the sustained growth in remittances since June 2020, including the significant increase in the average amount remitted. Using data from over 300 remittances corridors (from 23 U.S. states to 14 Salvadoran departments), we find that this increase is primarily explained by the dynamics of U.S. states real wages, as well as more temporary factors like U.S. unemployment relief (including the extraordinary pandemic support), U.S. states mobility, and COVID-19 infections at home. The paper also analyses what role the change in the modes of transmission of remittances, additional U.S. fiscal stimulus and U.S. labor market developments, especially in the sectors were CAPDR and Mexican migrants preponderantly work, play in explaining aggregate remittances growth.
Aleksandra Babii, Ms. Alina Carare, Dmitry Vasilyev, and Mr. Yorbol Yakhshilikov

, section III presents stylized facts on the evolution of aggregate remittances to CAPDR countries. Section IV applies the traditional empirical model of the evolution of remittances to CAPDR countries, through two methods, while section V examines the evolution of aggregate remittances through the prism of volume and value effects. Section VI analyses the drivers of average value of remittances sent by an average Salvadoran migrant in the U.S. states to Salvadoran departments. Section VII discusses policy implications and concludes. II. Literature Review The

Shinya Kotera and Jochen M. Schmittmann

This paper investigates labor market dynamics in Japan during the COVID-19 pandemic drawing on macro and micro data. The pandemic and related containment measures had a large negative impact on employment, labor force participation, earnings, and labor market mobility, although policy support through furlough schemes partially mitigated the rise in unemployment. Our results indicate that industry effects were a crucial driver of labor market outcomes for different groups of employees — women, younger age groups, nonregular, self-employed, and low-income workers accounted for a disproportional share of employment in the hardest hit industries. We also find empirical evidence for the need to improve childcare and related support, training and upskilling offerings, and teleworking availability, and the role of skill mismatches in reducing labor market mobility and resource reallocation.

Aleksandra Babii, Ms. Alina Carare, Dmitry Vasilyev, and Mr. Yorbol Yakhshilikov

Copyright Page © 2022 International Monetary Fund WP/22/92 IMF Working Paper Western Hemisphere Department Evolution of Remittances to CAPDR Countries and Mexico During the COVID-19 Pandemic Prepared by Aleksandra Babii, Alina Carare, Dmitry Vasilyev, and Yorbol Yakhshilikov 1 Authorized for distribution by Manuela Goretti May 2022 IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate . The views expressed in IMF Working Papers are those of the author(s) and do not

Mr. Alexei P Kireyev

most countries there is a minimum threshold for remittances below which individual transfers are simply not recorded. 2 While some countries estimate the transfers below this threshold in the balance of payments, many others simply ignore them, resulting in an underestimation of remittances. The analysis of the evolution of remittances over time also presents a problem, as improvements in reporting systems, lower transaction costs, and a potential shift from informal to formal channels of remittance flows, all complicate intertemporal comparability of data

Mr. Jacques Bouhga-Hagbe
Workers' remittances have been playing an increasingly important role in the balance of payments of many countries and can significantly contribute to the strength of their external positions. Assessing the likely stability of remittance flows could be a valuable input to the analysis of their external vulnerabilities. This paper argues that "altruism," as a motive to send money home, would contribute to the stability of these flows. Using a simple framework that relates workers' remittances to agricultural GDP, which is used as an indicator of economic "hardship" in the home country, evidence suggests that altruism could have played an important role in the flow of remittances to Egypt, Jordan, Morocco, Pakistan, and Tunisia in recent years.
Mr. Jacques Bouhga-Hagbe

suggest that the statistical model we present in equation (1) could explain the evolution of remittances in the long-run in these five countries and that the variable “ Agricultural GDP ” significantly enters the long-run relation with the sign expected. 14 As argued above, these findings support the view that altruism played an important role in workers’ decision to send money to Egypt, Jordan, Morocco, Pakistan, and Tunisia during this period. IV. C onclusion Our purpose in this paper was to look for potential evidence of altruistic motives behind workers

International Monetary Fund

further attract remittance inflows through investment. To this end, a faster implementation of the authorities’ structural reform agenda could be essential. 43. The paper is organized as follows . Section II below discusses the evolution of remittances in Morocco, including their main characteristics and their impact on the balance of payments and the conduct of monetary policy. Section III discusses the potential determinants of workers’ remittances in general and presents the long-run relation suggested by the empirical evidence. Conclusions and policy

Mr. Alexei P Kireyev
The paper seeks to assess the macroeconomic implications of large-scale inward remittances for a small open economy. By including remittances in several standard models, the paper concludes that the overall macroeconomic impact of remittances is likely to be ambiguous. The impact depends on the structural characteristics of the receiving country, in particular its consumption and investment patterns, and its capacity to manage large financial inflows. As data deficiencies and methodological problems associated with remittances preclude crosscountry empirical investigation, the paper illustrates these findings with data on Tajikistan, where remittances as a share of GDP are among the highest in the world. The paper also evaluates the pros and cons of remittances in a broader political economy context.
International Monetary Fund
This Selected Issues paper analyzes the recent developments in the Moroccan economy and its policy challenges over the medium term. It assesses the sustainability of public debt in Morocco. The paper uses the analytical framework for assessing debt sustainability in emerging market countries endorsed by the IMF Executive Board and compares Morocco’s vulnerabilities with those of the average emerging market country. The paper also examines the effects on Morocco’s trade pattern of the ongoing integration with the European Union within the Barcelona process.