Europe

United States

Canada

Latin

America

and the

Caribbean

Middle East

Asia and Pacific

Africa

CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

CBO

Migrants’

Remittances and

Related Economic

Flows

FEBRUARY 2011
Pub. No. 4038
The Congress of the United States 

O Congressional Budget Office

CBO

Migrants’ Remittances and 

Related Economic Flows

February 2011
CBO

Notes and Definitions

Migrants: People who move to a country other than that of their usual residence, whether legally or illegally. Shomigrants stay or are expected to stay for a period of at least three months but less than a year; long-term migrantare expected to stay for a period of at least a year, so the host country becomes their new country of usual residennot of citizenship.Personal transfers: Transfers in cash or in kind from resident households in one country to households in anothe

such transfers from the United States are remittances by long-term foreign-born migrants to family members in 

home country; some portion is by foreign-born residents who have acquired citizenship or by natural-born citizPersonal transfers, as reported in Exhibit 1, are what the U.S. Department of Commerce’s Bureau of Economic A(BEA) terms “personal transfers by the foreign-born population.” Personal transfers, as reported in Exhibits 9 th12, are what the International Monetary Fund terms “workers’ remittances.” Compensation of employees: Wages, salaries, and other forms of compensation, in cash or in kind, paid to wor

the international economic accounts maintained by BEA, “compensation of employees” refers to compensation workers who have worked for less than one year in a country other than the one in which they reside. All such csation is treated in international economic accounts as a flow of funds from a worker’s host country to his or hecountry, even though some unmeasured portion is spent in the host country. Transfers of money by short-term mto their home country are considered part of compensation and therefore are not classified as personal transferscompensation of employees” refers to the difference between the compensation of short-term migrants in a counthe compensation of that country’s residents working as short-term migrants in other countries.Migrants’ remittances: The main estimate of remittances reported in this document, composed of personal tranreported in Exhibit 1, plus compensation of employees. As estimated by BEA, these remittances include personfers by the foreign-born population, which includes people who have become U.S. citizens.Private remittances and other transfers: Private remittances are personal transfers plus institutional remittancestutional remittances include funds transferred and goods shipped to foreign residents by religious, charitable, edtional, scientific, and similar nonprofit organizations. Other transfers are certain types of international insuranc
CBO

payments and taxes withheld on certain types of international transactions. This document reports only on net 

remittances and other transfers (that is, outflows minus inflows).

Private remittances and related flows: Private remittances and other transfers plus compensation of employees

document reports only on net private remittances and related flows (that is, outflows minus inflows).

Migrants’ capital transfers: Transfers of financial assets made by migrants as they move from one country to an

and stay for more than one year. Under recent changes in the structure of the international economic accounts, includes such capital transfers in its estimates of changes in a nation’s net international investment position but dinclude them in estimates of international monetary flows, because they do not involve a transaction between a of the United States and a resident of another country.

High-, middle-, and low-income countries: Regions of the world are as defined in World Bank, World Develop

Report, 2010: Development and Climate Change (Washington, D.C.: World Bank, p. 377). High-income countrinclude the United States, Canada, many countries in Europe, Australia, New Zealand, Japan, and South Korea

countries of Europe and Asia are among the middle- and low-income countries.
Preface

CBO

Migrants’ remittances—payments sent by foreign-born workers back to their home country—have become a significant source of monetary inflows for many countries. In 2009, such remittances from the United States to other countries totaled more than $48 billion, nearly 30 percent more in inflation-adjusted terms than they wein 2000. People in Mexico receive more of the remittances sent from the United States than do residents of any other country. This document updates and expands upon the Congressional Budget Office’s (CBO’s) May 2005 publication Remittances: International Payments by Migrants. That paper included data through 2003; this document includdata through 2009. The existing data on global remittances are not of very high quality, however, and the comparisons and trends reported here should be viewed only as approximations.Jonathan A. Schwabish of CBO’s Health and Human Resources Division and Robert Shackleton of CBO’s Macroeconomic Analysis Division wrote the document under the supervision of Bruce Vavrichek and Robert Dennis, respectively. Sarah Axeen and Jimmy Jin provided research assistance. The document benefited from the comments of Greg Acs, Kim Kowalewski, Joyce Manchester, Melissa Merrell, Brian Prest, and David Rafferty—all of CBO—as well as Anne Flatness of the Bureau of Economic Analysis, Dilip Ratha of the World Bank, and Roberto Coronado and Pia Orrenius of the Federal Reserve Bank of Dallas. (The assistanof external reviewers implies no responsibility for the final product, which rests solely with CBO.)John Skeen edited the document, and Sherry Snyder proofread it. Maureen Costantino designed the cover and prepared the document for publication. Monte Ruffin printed the initial copies, and Simone Thomas produced the electronic version for CBO’s Web site (www.cbo.gov).

Douglas W. Elmendorf 

Director

February 2011
CBO

Exhibit 

List of Exhibits

Remittances from the United States

1. Migrants’ Remittances (Gross) from the United States, Selected Years, 1990 to 2009 2. Net Private Remittances and Related Flows from the United States, Selected Years, 1990 to 2009 3. Net Private Remittances and Related Flows from the United States to Various Regions, Selected Years, 1990 to 2004. Net Private Remittances and Related Flows from the United States to Selected Countries, Selected Years, 1990 to 2

Effects in Recipient Countries

5. Percentage of Foreign-Born Workers Who Remit, by Characteristics of Workers, 1999 to 2004 6. Cost of Remitting $200 to Selected Latin American and Caribbean Countries, Selected Years, 2001 to 2009 

Remittances to Mexico

7. Different Estimates of Remittance Flows Involving Mexico, 1990 to 2009 8. Migrants’ Remittances per Person in 2009 for States in Mexico 9. Average Annual Percentage Change in Migrants’ Remittances per Person from 2003 to 2009 for States in Mexico 

Global Flows of Remittances

10. Inflows of Personal Transfers, Compensation of Employees, and Migrants’ Capital Transfers Compared with Other 

Economic Flows for Various Regions and Countries, 2008 

11. Outflows and Inflows of Personal Transfers in Various Regions, Selected Years, 1990 to 2008 

12. Outflows and Inflows of Compensation of Employees in Various Regions, Selected Years, 1990 to 2008 13. Outflows and Inflows of Migrants’ Capital Transfers in Various Regions, Selected Years, 1990 to 2008 
CBO

Migrants’ Remittances and 

Related Economic Flows

Migrants to the United States often send money to people in their home country or take it with them when they return home. Those transfers can involve sending money through banks or other institutions to family members or others in the home country, making financial investments in the home country, or returning to the home country while retaining bank accounts or claims on other financial assets in the United States. All three types of actions are similar in their economic effects, even though only transfers of money through banks and other financial institutions to foreign individuals are commonly thought of as migrants’ remittances.1As one of the most important destinations of global migration, the United States is the largest national source of remittances. The opportunity to send or bring remittances home is one of the 

important motivations for migration, and policies that affect migration to the United States could affect outflows of remittances. In turn, the flow of remittances can affect economic growth, labor markets, poverty rates, and future migration rates in the United States as well as in recipient countries.This document updates and expands upon the Congressional Budget Office’s previous analysis of remittances—Remittances: International Payments by Migrants (May 2005)—and presents data through 2009. The new presentation provides a better view of people’s total transfers of money between the United States and other countries but, because of changes in the way the data are collected and reported, does not provide as much information as was previously available on the portion of those transfers that is attributable to migrants. (See “Notes and Definitions” at the beginning of this document for a summary of terminology and the appendix for a discussion of recent changes in the classification of remittances.) The existing data on global remittances and related economic flows are not of very high quality, and the comparisons and trends reported here should be viewed only as approximations.

Remittances frUnited States The Bureau of Econothat migrants’ remittalion in 2009—nearly development assistancernment.2 Nearly $38 

personal transfers by fUnited States to housabout $11 billion, refemployees who were ithan a year; some of twas spent in the Unitthe regional destinatiois available for 2009, mate, about two-thirdto countries in the Wquarter went to countand the rest went to c

1. In data published by the International Monetary Fund 

and the U.S. Department of Commerce’s Bureau of Economic Analysis, a distinction is made between transfers by resident migrants (those who stay or are expected to stay in a country for a year or more) and nonresident workers (who stay or are expected to stay for less than a year). In this document, transfers by both groups (along with certain other flows that are also included in the relevant data series) are referred to as migrants’ remittances. 

2. The phrase used by BE

transfers by foreign-boto households abroad pof employees.” Data oable from the Developof the Organisation foand Development; see 0,3355,en_2649_3444
CBO

MIGRANTS’ REMITTA

Africa.3 BEA also reports that, in 2009, migrants’ 

capital transfers (that is, individuals’ transfers for themselves, as opposed to transfers to others) amounted to nearly $3 billion on net.BEA estimates outflows of personal transfers on the basis of four characteristics: the size of the foreignborn population (differentiated by duration of stay in the United States, family type, country of origin, and sex), the percentage of the foreign-born population that remits, the income of the foreign-born population, and the percentage of income that the foreign-born population remits.No information is publicly available on flows of migrants’ remittances from the United States to specific regions or countries. Such details are available only for a category that BEA calls “net private remittances and other transfers,” which measures outflows minus inflows (rather than outflows only) and includes institutional remittances by U.S. nonprofit organizations as well as a variety of other minor transactions. For 2009, BEA reports net private remittances and other transfers of $74 billion and net compensation of nonresident employees of nearly $8 billion, for a total of $82 billion in net outflows. That figure represented about 0.6 percent of total U.S. gross domestic product (GDP) in 2009. About 40 percent, or $33 billion, went to other countries in the Western Hemisphere. Another $17 billion was sent to countries in Asia and the Pacific, $9 billion flowed to countries in Europe, and $5 billion was transferred to countries in Africa.4

Effects in Recipient Countries (Exhibits 5 and 6)Remittances can have both positive and negative effects on the economies of recipient countries.5

The transfers provide a country’s economy with foreign currency, help finance imports, improve the balance of payments in its international accounts, and increase national income. However, the migration that generates remittances also reduces the labor force of the country of origin, and remittances may reduce the remaining family members’ incentive to work. The available evidence suggests that recipients with income below a threshold level tend to use remittances primarily for consumption, including, for instance, purchases of food, consumer goods, and health care. In surveys of people in the United States who remitted money to Mexico, for example, 70 percent reported that consumption was the only purpose, 3 percent reported that asset accumulation was the only purpose, and 26 percent said that both consumption and asset accumulation were reasons for remitting. Nevertheless, evidence from some developing countries suggests that households in those countries tend to save a larger portion of income from remittances than from other sources of income, providing a source of capital for investment. 

Concurrent with the remittances has been by financial institutioBetween 2001 and 20fer $200 to six countrby an average of at leaHaiti) to 10 percent psibly because of lower from technological pramong migrants abou

Remittances to (Exhibits 7 to Mexico is the destinatremittances from the BEA’s estimates, of thfrom the United Statein the Western Hemiscompensation by shor$20 billion was identieconomic accounts as estimates, such flows Mexico (adjusted for of 2 percent per year bBanco de México estimfunds from abroad—nStates—were about $2does not estimate outBanco de México ind(adjusted for inflation11 percent per year duThe difference betweeMéxico’s estimates coferences in definitions methodology and souall Mexican banks and 

3. See Government Accountability Office, International 

Remittances: Different Estimation Methodologies Produce Different Results, GAO-06-210 (March 2006)

4. Those figures for various regions include some unknown 

portion of the $8 billion of compensation of nonresident employees that was, in fact, spent in the United States.

5. For a more extensive discussion of such effects, see 

Congressional Budget Office, Remittances: International Payments by Migrants (May 2005) and World Bank, “Migration and Remittances,” www.worldbank.org/prospects/migrationandremittances.
CBO

MIGRANTS’ REMITTA

were required to register with the Banco de México and to report monthly remittances by state. (Prior to that rule change, the Banco de México inferred remittances from a 1990 census of different Mexican financial institutions.) In addition, around that time, the “matricula consular”—an identification card issued by the Mexican government to Mexican nationals living outside of the country—began to be accepted for opening bank accounts in the United States; that change may have helped facilitate money transfers to Mexico in a way that allowed the Banco de México to better record them. Finally, the Banco de México also conducts a border survey that asks returning migrants about cash and goods that they are bringing to relatives in Mexico. With the apparent increased use of more formal channels to transfer money between the United States and Mexico and those border surveys, the official Mexican statistics are recording cash transfers not captured in the past.6

Global Flows of Remittances (Exhibits 10 to 13)According to the International Monetary Fund, total inflows of remittances globally—the sum of personal transfers, compensation of employees, and migrants’ capital transfers—were about $407 billion in 2008 (in nominal dollars), up from about $150 billion in 2002, an average increase of 18 percent per year. About two-thirds of global inflows was sent as personal transfers, about 30 percent was recorded as compensation of employees, and about 5 percent stemmed from migrants’ capital transfers. Although total inflows and outflows of global remittances should be equal, total recorded outflows—about $289 billion in 2008—are generally much lower than total recorded inflows. The discrepancy between total 

inflows and total outfciencies of remittance estimated in different Even when remittancdiscrepancies arise becchannels for transfers classification of remittrade receivables, or d

Total inflows of remittion of global economabout 1 percent of tot2008. For a number ofunds constitute a subFor at least six countrCaribbean, total inflo10 percent of GDP. Ftries, total inflows wereign direct investmen

6. For a review of issues surrounding measuring remittances 

between the United States and Mexico, see Jesus Cañas, Roberto Coronado, and Pia M. Orrenius, “Commentary on Session III: U.S.–Mexico Remittances: Recent Trends and Measurement Issues,” in James F. Hollifield, Pia M. Orrenius, and Thomas Osang, eds., Proceedings of the 2006 Conference on Migration, Trade, and Development (Federal Reserve Bank of Dallas, October 2006).

7. For a discussion of BE

Accountability Office, Estimation Methodolog2006); and ChristophU.S. International Accrent Business, vol. 85, n
CBO

Remittances from the United States
REMITTANCES FROM THE UNITED STATES MIGRANTS’ REMITTA

CBO

Exhibit 1.

Migrants’ Remittances (Gross) from the United States, Selected 

Years, 1990 to 2009(Billions of dollars)Source: Congressional Budget Office based on data from the Bureau of Economic Analysis.Notes: For definitions, see “Notes and Definitions” at the beginning of this document.a. Adjusted for inflation using the chain-type price index for U.S. gross domestic product.

1990 1995 2000 2005 2006 2007 2008 2009

Migrants' Remittances in Nominal Dollars

Personal transfers by the foreign-born 

population 8.4 15.9 23.4 31.3 34.3 36.9 38.5 37.6 5

Compensation of employees 3.5 6.3 7.5 9.3 9.5 10.1 10.4 10.8 4

____ ____ ____ ____ ____ ____ ____ ____

 Total 11.9 22.2 30.9 40.6 43.8 47.0 48.9 48.4 5

Migrants' Remittances in 2009 Dollarsa

Personal transfers by the foreign-born 

population 12.7 21.4 28.9 34.3 36.4 38.1 38.9 37.6 3

Compensation of employees 5.3 8.4 9.3 10.2 10.1 10.4 10.5 10.8 2

____ ____ ____ ____ ____ ____ ____ ____

 Total 18.0 29.8 38.2 44.5 46.5 48.4 49.3 48.4 3

1990s 2000s

2000–2009Percentage 

Average 

Change, 

Annual

Migrants’ remittantransfers sent from foreign-born workeforeign employees wless than a year—win 2009. Of that tosonal transfers by foUnited States sent the rest, about $11 tion of employees wStates for less than that compensation States, however, the remittances somewof money actually sStates.) The measuthat is, it does not can workers in othein the United Stateremittances by miggrew at an average from 2000 to 2009
REMITTANCES FROM THE UNITED STATES MIGRANTS’ REMITTA

CBO

Exhibit 2.

Net Private Remittances and Related Flows from the 

United States, Selected Years, 1990 to 2009(Billions of dollars)Source: Congressional Budget Office based on data from the Bureau of Economic Analysis with two exceptions: 

migrants’ capital transfers are from Helen Y. Bai and Mai-Chi Hoang, “Annual Revision of the U.S. International Transactions Accounts,” Survey of Current Business (July 2010), Table D; the number of 

foreign-born workers is based on monthly data from the Census Bureau, Current Population Surveys, Outgoing Rotation Groups, 1995 to 2009.

Notes: For definitions, see “Notes and Definitions” at the beginning of this document.

n.a. = not available.

a. Adjusted for inflation using the chain-type price index for U.S. gross domestic product.

1990 1995 2000 2005 2006 2007 2008 2009

Net Private Remittances and

Related Flows

Net private remittances and 

other transfers 13.1 23.4 37.2 65.8 57.2 73.8 77.6 74.4 8

Net compensation of employees 2.3 4.1 4.7 6.4 6.6 7.1 7.3 7.8 6

____ ____ ____ ____ ____ ____ ____ ____

 Total 15.4 27.5 41.9 72.2 63.8 80.9 85.0 82.2 8 Total in 2009 Dollarsa 23.3 37.0 51.8 79.2 67.8 83.4 85.8 82.2 5

Migrants' Capital Transfers n.a. n.a. 1.0 1.8 2.1 2.3 2.6 2.7 12Memorandum:Foreign-Born Workers (Millions) n.a. 12.9 18.9 22.0 23.1 24.0 24.1 23.9 3

2000–2009

Average

Percentage 

1990s 2000s Change, 

Annual

A somewhat differeis provided by a brotions that BEA calland other transfersinstitutional remittorganizations as weminor transactionsonly for net outflowinflows); among thtional remittances atransactions tend to Net outflows of pritransfers plus compamounted to $82 boutflows, taken togdocument as privatflows; that category various regions and it (and presented in addition, migrants’ individuals’ transfeamounted to nearly Net private remittaon average by 5 peradjusted dollars). Oflows represented aU.S. gross domestiabout 0.4 percent iexhibit). Over the 2number of foreign-States rose at a simipeople in 2009. REMITTANCES FROM THE UNITED STATES MIGRANTS’ REMITTA

CBO

Exhibit 3.

Net Private Remittances and Related Flows from the United States to 

Various Regions, Selected Years, 1990 to 2009(Billions of dollars)Source: Congressional Budget Office based on data from the Bureau of Economic Analysis.Notes: For the definition of private remittances and related flows, see “Notes and Definitions” at the beginning of 

this document.n.a. = not available.

a. Adjusted for inflation using the chain-type price index for U.S. gross domestic product.

1990 1995 2000 2005 2006 2007 2008 2009

Latin America, Canada, and 

Other Countries in the Western Hemisphere 8.6 17.8 24.8 35.9 34.6 37.1 39.1 32.9 3

Asia and Pacific n.a. n.a. 7.3 9.8 9.7 12.3 15.9 16.9 10

Europe -0.6 -0.4 0.8 12.4 1.7 7.9 4.5 9.2 32Africa n.a. n.a. 1.5 3.1 3.9 3.6 3.3 5.0 14Middle East n.a. n.a. 2.7 1.7 1.9 2.8 2.0 1.9 -4

Payments to International Organizations 

and Unallocated Payments 2.3 3.6 4.8 9.4 12.1 17.2 20.2 16.2 15

____ ____

____

____

____

____

____

____

Total 15.4 27.5 41.9 72.2 63.8 80.9 85.0 82.2 8Total in 2009 Dollarsa 23.3 37.0 51.8 79.2 67.8 83.4 85.8 82.2 5

2000–2009

1990s 2000s

Annual

Percentage 

Change, Average 

Net private remittanUnited States—that other transfers from compensation of empmigrants—exceeded 40 percent of that amwas identified in the countries in Latin AmWestern HemisphereAsian and Pacific couwent to countries in Middle East. The remwas either sent to intas the World Bank, othe United Nations) particular region.The amount of net pflows grew at an averyear between 2000 antion, the average rate cent. Although peopabout 11 percent of tfers to that region greany other region over about $1 billion in 22009. Moreover, net flows varied significainstance, the net outf$0.8 billion in 2000 Much of the volatilitunrelated to remittanand taxes withheld) ttransfers” recorded in Asian and Pacific cou$7 billion in 2000 to by an average of 10 pcountries in Latin Amthe Western Hemispof private remittanceamounts grew relativing from about $25 bin 2009, or by an ave
REMITTANCES FROM THE UNITED STATES MIGRANTS’ REMITTA

CBO

Exhibit 4.

Net Private Remittances and Related Flows from the United States to 

Selected Countries, Selected Years, 1990 to 2009(Billions of dollars)Source: Congressional Budget Office based on data from the Bureau of Economic Analysis.Notes: For the definition of private remittances and related flows, see “Notes and Definitions” at the beginning of 

this document.n.a. = not available; * = between -$50 million and $50 million; ** = undefined because the amount in 2000 was negative; *** = not calculated because the value in 2000 was less than $50 million.

a. Adjusted for inflation using the chain-type price index for U.S. gross domestic product.

1990 1995 2000 2005 2006 2007 2008 2009

Mexico 5.6 10.2 14.1 18.0 18.7 19.9 20.8 19.9 4China n.a. n.a. 1.5 2.5 2.6 3.1 3.2 3.2 9India n.a. n.a. 1.1 1.9 2.3 3.0 2.9 3.2 13Canada 0.1 0.4 0.5 0.4 -0.7 1.3 1.5 2.2 17Korea n.a. n.a. 0.3 0.6 0.6 0.7 0.8 1.0 14Brazil n.a. n.a. 0.4 0.7 0.9 1.0 1.2 0.8 8Netherlands * * -0.1 -0.9 -0.5 -0.9 -0.2 0.7 **Luxembourg n.a. n.a. * 0.1 -0.1 * 0.1 0.5 ***Taiwan n.a. n.a. 0.4 0.5 0.4 0.5 0.5 0.5 3Japan 0.1 * -0.5 -1.3 -1.9 -1.6 0.3 0.5 **

___ ___ ____ ____ ____ ____ ____ ____

Total, Selected Countries 5.9 10.7 17.8 22.7 22.3 27.0 31.2 32.4 7

Total, All Countries 15.4 27.5 41.9 72.2 63.8 80.9 85.0 82.2 8

Memorandum:

2009 dollarsa 8.9 14.3 22.0 24.9 23.7 27.8 31.5 32.4 4

Total, All Countries in 2009 dollarsa 23.3 37.0 51.8 79.2 67.8 83.4 85.8 82.2 5

Total, Selected Countries in

Percentage 

Change, 

2000–2009

1990s 2000s

Average 

Annual

In 2009, 10 countr$32 billion, or aboremittances and relStates. People in M$20 billion, the larabout 61 percent o10 countries. Peoplreceived over $3 biaccounted for abouthose 10 countries.Between 2000 and tances and related fgrew by an average adjusted for inflatioin India experiencethe period, rising fr$3.2 billion in 20013 percent per yearChina rose from $1$3.2 billion in 2009 percent per year. were erratic over th$0.5 billion in 200but net outflows frsome of the intervestantial share of nerelated flows went countries experienctransfers over the p
CBO

Effects in Recipient Countries
EFFECTS IN RECIPIENT COUNTRIES MIGRANTS’ REMITTA

CBO

Exhibit 5.

Percentage of Foreign-Born Workers Who Remit, by 

Characteristics of Workers, 1999 to 2004Source: Congressional Budget Office based on data from the Latin American Migration Project and the Mexican 

Migration Project. 

Note: * = the small number of observations renders the estimate unreliable.a. Legal residents include legal permanent residents, legal temporary residents and visitors, refugees, and 

people seeking asylum.

b. Data on the 2000s differ by country. Data for Costa Rica are from surveys administered from 2000 to 2003; 

Dominican Republic, 1999 to 2001; Mexico, 1999 to 2004; and Nicaragua, 2000 to 2003.

c. Consumption includes purchases of food and maintenance, a vehicle, and consumer goods and purchases or 

payments related to a special event, recreation and entertainment, education, health care, and debt. Asset accumulation includes the construction or repair of a house; purchases of a house or lot, tools, livestock, and 

agriculture inputs; the start or expansion of a business; and savings.

Status

Citizen or legal residenta 66 68 73 57

Unauthorized resident 81 * 83 80

Educational Attainment

Up to 15 years 70 65 80 6316 years or more * 73 56 53

Decade of arrival

1990s 71 82 83 712000sb 88 * 92 65

Reason for Remittancec

Consumption only 58 89 70 81Asset accumulation only 6 1 3 1Both 35 6 26 16Not specified 1 4 1 1

Costa Rica Dominican Republic Mexico Nicaragua

Surveys of migrantand Caribbean couDominican Repubgua—provide additeristics of those senpurposes to which According to those workers, which encbetween 1999 and legal residents in thtances to those homthorized residents. workers with lower ment are more liketheir home country levels of educationais true for the Domborn workers who more recently (that the 1990s) are also send remittances hWorkers from all foare much more likethe purpose of conaccumulation (inclchasing a house anbusiness). Well oveworkers surveyed stthe only purpose focountry; that share for those from the Dthan 10 percent of surveyed reported tthe only reason for cent and 35 percenthat both consumpwere reasons for rem
EFFECTS IN RECIPIENT COUNTRIES MIGRANTS’ REMITTA

CBO

Exhibit 6.

Cost of Remitting $200 to Selected Latin American and 

Caribbean Countries, Selected Years, 2001 to 2009(Percent)Source: Manuel Orozco, Elisabeth Burgess, and Landen Romei, A Scorecard in the Market for Money Transfers: 

Trends in Competition in Latin America and the Caribbean (Washington, D.C.: Inter-American Dialogue, 

June 18, 2010). 

Note: The data represent average remittance costs (fees and commissions) from nearly 40 lending companies, 

including money-transfer operators and commercial banks, covering about 90 percent of all remittance 

flows from the United States to Latin American and the Caribbean.

Haiti 9.0 6.0 6.7 4.4 7.0 -3.1Jamaica 9.8 7.2 8.2 8.4 6.7 -4.6Dominican Republic 9.4 5.8 6.4 5.2 6.0 -5.5Mexico 8.8 10.4 6.0 7.3 5.6 -5.5El Salvador 6.7 12.7 5.2 7.8 4.5 -4.9Colombia 10.1 7.5 5.0 5.7 4.4 -9.9

Change, 2001–2009

Annual Percentage 

2001 2005 2009 2003 2007

Average 

Fees for remittancepast eight years, potransaction costs reprogress and more about alternative wexample, the cost o(from any country) 5.5 percent per yeathe fees fell from 85.6 percent in 2009Colombia declined year, falling from a4.4 percent in 2009There was wide varexhibit) in the remmajor banks and m(such as Western U2009, the charge to United States to Mto 7 percent. The rfrom 2008 to 2009fee to transfer $200 the Dominican Rep6 percent to 28 perranged from 4 perc

1. Data are from the thir

Group, “Remittance Phttp://remittanceprice
CBO

Remittances to Mexico
REMITTANCES TO MEXICO MIGRANTS’ REMITTA

CBO

Exhibit 7.

Different Estimates of Remittance Flows Involving Mexico, 

1990 to 2009(Billions of dollars)Source: Congressional Budget Office based on data from the Bureau of Economic Analysis (BEA) and the Banco 

de México.

Note: Data from BEA describe private remittances and related flows, and data from the Banco de México describe 

migrants’ remittances. See “Notes and Definitions” at the beginning of this document.

a. The difference between total inflows and total outflows. BEA’s estimates count only those dollars flowing 

between the United States and Mexico.

b. Adjusted for inflation using the chain-type price index for U.S. gross domestic product.c. The estimates count funds flowing from all countries to Mexico and do not capture funds transferred out of 

Mexico.

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

05

1015202530

Total Funds

Flowing into Mexico

(Banco de México)

Net Flows Between the

United States and

Mexico (BEA)

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

(Bureau of Economic Analysis)a

Billions of dollars 5.6 10.2 14.1 14.8 15.6 15.7 16.8 18.0 18.7 19.9 20.8 19.9 4Billions of 2009 dollarsb 8.5 13.7 17.4 17.9 18.6 18.3 19.1 19.7 19.9 20.5 21.0 19.9 2

Total Funds Flowing into Mexico(Banco de México)c

Billions of dollars 4.0 4.0 7.0 9.4 10.3 15.5 18.8 22.2 26.0 26.5 25.6 21.5 13Billions of 2009 dollarsb 6.1 5.4 8.7 11.3 12.3 18.1 21.3 24.3 27.6 27.4 25.8 21.5 11

1990s 2000s

Average 

Percentage 

Change, 

2000–2009

Net Flows Between the 

Annual

United States and Mexico

Net private remittanUnited States to Mexthe United States to to BEA’s estimates, aoccurred in 2009. Ththat gross inflows of abroad—not only froabout $22 billion—acent of Mexico’s GDde México do not indinflows or take outfloare believed to come outflows are believed estimates should be sFor the 2000–2006 pBanco de México shoin gross inflows from 21 percent in inflatioestimates for net inflUnited States (an anninflation-adjusted dothe Mexican statisticBEA’s roughly continThe U.S. and Mexicathings (net flows from and gross flows from ico, respectively) but including source data constitutes a remittanBEA estimates the trcomposition, and inculation in the United Banco de México has BEA’s approach may steady rise in its estimrequirements may pathe Banco de Méxicostatistics also indicate from abroad declined 2007 to 2009, perhanomic slowdown. 

REMITTANCES TO MEXICO MIGRANTS’ REMITTA

CBO

Exhibit 8.

Migrants’ Remittances per Person in 2009 for States in Mexico

Source: Congressional Budget Office based on data from the Banco de México and Consejo Nacional de 

Población.

Notes: For the definition of migrants’ remittances, see “Notes and Definitions” at the beginning of this document.

State-level estimates from the Banco de México do not include institutional remittances or other transfers. Estimates are gross inflows; that is, the estimates count funds flowing from all countries to Mexico and do 

not capture funds transferred out of Mexico.

$300 or More$200 to $300$100 to $200Less Than $100

Baja

California

Baja

California

Sur

Colima

Quintana

Roo

Sonora

Chihuahua

Coahuila

Nuevo

León

Tamaulipas

San Luis

Potosí

Durango

Sinaloa

Zacatecas

Nayarit

Jalisco

Aguascalientes Guanajuato

Michoacán

Guerrero

Oaxaca Chiapas

Hidalgo

Mexico

Puebla

Veracruz

Campeche

Yucatán

Morelos

Tlaxcala

Tabasco

Querétaro

According to data fand Consejo Naciocan government’s aicy), gross remittan(not only from the varied greatly by thgross remittances pof $55 per person i(located on the norinsula) to $535 per (located in the centalong the Pacific coThe state of Mexiconot include Mexico by population in 2residents. Remittantotaled about $1.7 person. The three states in percentage of peopStates between 199Michoacán, and Gthe center of the coremittances per perstates that border tfornia, Chihuahua, Sonora, and Tamaurelatively low emigrremittances that exof $197 per person

2. Emigration rates are fr

Emigration, RemittancMexico, Working PapeInter-American Devel
REMITTANCES TO MEXICO MIGRANTS’ REMITTA

CBO

Exhibit 9.

Average Annual Percentage Change in Migrants’ Remittances per 

Person from 2003 to 2009 for States in MexicoSource: Congressional Budget Office based on data from the Banco de México and Consejo Nacional de 

Población.

Notes: For the definition of migrants’ remittances, see “Notes and Definitions” at the beginning of this document.

State-level estimates from the Banco de México do not include institutional remittances or other transfers. Estimates are gross inflows; that is, the estimates count funds flowing from all countries to Mexico and do 

not capture funds transferred out of Mexico.

8 Percent or More6 Percent to 8 Percent4 Percent to 6 PercentLess Than 4 Percent

Sonora

Chihuahua

Coahuila

Tamaulipas

Durango

Sinaloa

Zacatecas

Nayarit

Jalisco

Aguascalientes Guanajuato

Michoacán

Colima

Guerrero

Oaxaca Chiapas

Hidalgo

Mexico

Morelos

Tlaxcala

Puebla

Veracruz

Tabasco Campeche

Quintana

Roo

Baja

California

Baja

California

Sur Querétaro

Yucatán

San Luis

Potosí

Nuevo

León

According to data fand Consejo NacioMexican governmepolicy), gross remitabroad (not only frquickly for most stthe past decade (th2009 than they weOf the 32 states in average annual growperson—the sum oand compensation Mexican populatioper year from 2003 (Sonora and Baja Cborder with the Undouble-digit rates o(Aguascalientes, neand Campeche, on experienced average 2 percent. CBO

Global Flows of Remittances
GLOBAL FLOWS OF REMITTANCES MIGRANTS’ REMITTA

CBO

Exhibit 10.

Inflows of Personal Transfers, Compensation of Employees, and 

Migrants’ Capital Transfers Compared with Other 

Economic Flows for Various Regions and Countries, 2008Source: Congressional Budget Office based on data from the International Monetary Fund and the World Bank. Notes: For definitions of personal transfers, compensation of employees, and migrants’ capital transfers, see “Notes and 

Definitions” at the beginning of this document.* = between zero and 0.5 percent; ** = Haiti received only a small amount of foreign direct investment in 2008.

a. Rounded to the nearest 10 percent.

Region/Country Gross Domestic ProductAll Countries 406.7 18 2 20High-Income Countries 98.4 11 1 10

United States 3.1 1 * *

Low- and Middle-Income Regions/Countries 308.3 21 5 40

Europe and Central Asia 62.6 31 4 20Middle East and North Africa 31.7 15 5 50Sub-Saharan Africa 25.5 34 7 80South Asia, East Asia, and Pacific 124.0 21 5 50

China 23.2 44 1 20

India 49.9 21 17 120

Pakistan 7.0 12 28 130All others 43.8 16 6 140

Latin America and Caribbean 64.5 15 6 50

Argentina 0.7 22 1 10

Colombia 4.9 12 11 50Costa Rica 0.6 16 4 30Dominican Republic 3.6 8 30 120

Ecuador 2.8 12 14 280

El Salvador 3.8 12 62 490Guatemala 4.5 19 46 530Haiti 1.4 13 169 **Honduras 2.9 23 41 330Jamaica 2.2 10 41 150Mexico 26.3 16 8 120Nicaragua 0.8 14 28 130All others 10.1 18 2 10

Total As a Percentage of Receiving Country's:

nominal

dollars)

(Billions of

2002-2008

Change,

Percentage

Investmenta

Direct

Foreign

Average

Services

Goods and

Exports of

Annual

1

**

2

1

33

2

1

44

3

2

*

22

8

5

17

11

20

22

15

2

12

*

Region/Country Gross Domestic ProductAll Countries 406.7 18 2 20High-Income Countries 98.4 11 1 10

United States 3.1 1 * *

Low- and Middle-Income Regions/Countries 308.3 21 5 40

Europe and Central Asia 62.6 31 4 20Middle East and North Africa 31.7 15 5 50Sub-Saharan Africa 25.5 34 7 80South Asia, East Asia, and Pacific 124.0 21 5 50

China 23.2 44 1 20

India 49.9 21 17 120

Pakistan 7.0 12 28 130All others 43.8 16 6 140

Latin America and Caribbean 64.5 15 6 50

Argentina 0.7 22 1 10

Colombia 4.9 12 11 50Costa Rica 0.6 16 4 30Dominican Republic 3.6 8 30 120

Ecuador 2.8 12 14 280

El Salvador 3.8 12 62 490Guatemala 4.5 19 46 530Haiti 1.4 13 169 **Honduras 2.9 23 41 330Jamaica 2.2 10 41 150Mexico 26.3 16 8 120Nicaragua 0.8 14 28 130All others 10.1 18 2 10

Total As a Percentage of Receiving Country's:

nominal

dollars)

(Billions of

2002-2008

Change,

Percentage

Investmenta

Direct

Foreign

Average

Services

Goods and

Exports of

Annual

1

**

2

1

33

2

1

44

3

2

*

22

8

5

17

11

20

22

15

2

12

*

According to data froFund, which collects tries, total inflows of of personal transfers, and migrants’ capital terms, about $407 bithan $48 billion was 

Global inflows of remaverage of 18 percent they were around $1inflation). Personal transfers, comigrants’ capital trantion of global economabout 1 percent of to(GDP) worldwide in receiving countries, mminor relative to othflows, such as exportNonetheless, they maimportant source of itries. For example, in10 percent of GDP iexhibit—all in CentrFor low- and middlegroup, inflows from equivalent to about 2 5 percent of exports 40 percent of foreign tion, total inflows of four times the amounassistance received by countries from goverlateral institutions in exhibit).



3. Data reported by the I

United States differ sliupdated data reported through 4.
GLOBAL FLOWS OF REMITTANCES MIGRANTS’ REMITTA

CBO

Exhibit 11.

Outflows and Inflows of Personal Transfers in Various Regions, 

Selected Years, 1990 to 2008(Billions of dollars)Source: Congressional Budget Office based on data from the International Monetary Fund.Notes: For the definition of personal transfers, see “Notes and Definitions” at the beginning of this document.

* = less than $50 million.

1990 1995 2000 2005 2006 2007 2008

High-Income Countries 20.9 31.0 40.2 62.7 74.2 87.3 93.2 11Low- and Middle-Income Countries 15.0 22.1 20.8 35.7 42.2 49.9 60.9 14

Europe and Central Asia * * 0.3 5.0 8.3 12.3 12.0 58Latin America and Caribbean 0.8 0.7 1.3 1.6 1.8 2.6 3.1 11Middle East and North Africa 12.7 18.8 17.6 20.6 23.1 23.4 31.4 7South Asia, East Asia, Pacific * 1.4 0.3 7.1 7.5 9.8 13.4 61Sub-Saharan Africa 1.5 1.1 1.3 1.5 1.5 1.8 0.9 -4

All Countries 35.9 53.1 61.0 98.4 116.4 137.3 154.1 12High-Income Countries 12.4 12.3 10.6 11.7 14.3 17.5 18.8 7Low- and Middle-Income Countries 33.4 38.3 61.5 154.2 184.7 223.2 249.9 19

Europe and Central Asia 12.6 5.0 7.6 13.7 18.7 29.8 32.9 20Latin America and Caribbean 4.7 11.8 18.1 46.8 55.5 59.5 59.9 16Middle East and North Africa 9.2 8.3 8.8 19.8 21.6 26.2 27.7 15South Asia, East Asia, Pacific 6.2 11.5 24.2 55.7 67.7 83.9 105.7 20Sub-Saharan Africa 0.7 1.7 2.9 18.2 21.3 23.8 23.7 30

All Countries 45.8 50.6 72.1 165.9 199.0 240.6 268.7 18

Average

Annual

Percentage

Outflows

Inflows

2000–2008

1990s 2000s Change,

According to data froFund, in 2008 total owere in the vicinity oinflows neared $270 transfers accounted finflows from personaemployees, and migrin Exhibit 10).The discrepancy betwinflows underscores tdata on global remittbe equal in total). As tries have greater incethan sending countriflows, a fact that suggreported inflows are Most outflows—abowere transferred from other countries. Anoof the total, emanateNorth Africa. Nearly low- and middle-incoaccounted for about countries in Latin Amaccounted for anotheTotal outflows of perage of about 12 perce2008, while total inflabout 18 percent per tion). Inflows grew thincome countries in from $2.9 billion in 2an average increase oand middle-income cCentral Asia and in SPacific experienced a20 percent per year itransfers. 

GLOBAL FLOWS OF REMITTANCES MIGRANTS’ REMITTA

CBO

Exhibit 12.

Outflows and Inflows of Compensation of Employees in 

Various Regions, Selected Years, 1990 to 2008(Billions of dollars)Source: Congressional Budget Office based on data from the International Monetary Fund.Notes: For the definition of compensation of employees, see “Notes and Definitions” at the beginning of this 

document.

* = less than $50 million.

1990 1995 2000 2005 2006 2007 2008

High-Income Countries 23.3 34.6 35.1 57.6 62.4 71.6 80.6 11Low- and Middle-Income Countries 2.8 4.2 8.0 17.7 22.2 29.3 41.8 23

Europe and Central Asia * 1.0 1.4 7.1 10.5 16.1 27.2 45Latin America and Caribbean 0.1 0.3 0.4 0.4 0.6 0.5 0.6 5Middle East and North Africa 0.9 1.4 3.3 3.8 4.1 4.5 5.4 6South Asia, East Asia, Pacific 0.5 0.6 1.7 4.7 5.2 6.1 6.6 18Sub-Saharan Africa 1.3 0.8 1.2 1.6 1.8 2.1 2.0 7

All Countries 26.1 38.8 43.1 75.3 84.6 100.9 122.4 14High-Income Countries 19.7 25.4 29.7 46.3 49.7 58.0 63.8 10Low- and Middle-Income Countries 4.8 10.8 11.9 32.0 36.2 44.8 53.1 21

Europe and Central Asia * 0.7 3.6 16.1 18.9 23.6 27.6 29Latin America and Caribbean 0.9 1.2 1.8 2.5 2.6 2.5 3.0 7Middle East and North Africa 0.5 1.1 1.4 2.5 2.5 2.8 3.1 11South Asia, East Asia, Pacific 2.4 6.9 4.2 9.1 10.5 13.8 17.7 20Sub-Saharan Africa 0.9 1.0 1.0 1.7 1.8 2.1 1.8 8

All Countries 24.5 36.3 41.6 78.3 86.0 102.9 117.0 14

Average

Annual

Change,

Inflows

1990s 2000s

Percentage

2000–2008

Outflows

About $120 billion oin 2008 were categoremployees—defined expected to stay in thyear. That amount actotal flows. Most of tof employees (about high-income countrioriginating in low- anthe majority came froCentral Asia. Inflows ees were also concentcountries but to a smAmong inflows to lowtries, just over half wCentral Asia; anotheSouth Asia, East AsiaBetween 2000 and 2compensation of empof about 14 percent (Most of the increase to countries in Europexperienced a 45 perbetween 2000 and 20quence of the collapsas well as accessions tAs a share of total coflows of compensatiolow- and middle-incogrown over the past 2tion of employees in about 19 percent of oof inflows for all coumiddle-income coun34 percent of outflowfor all countries. GLOBAL FLOWS OF REMITTANCES MIGRANTS’ REMITTA

CBO

Exhibit 13.

Outflows and Inflows of Migrants’ Capital Transfers in 

Various Regions, Selected Years, 1990 to 2008(Billions of dollars)Source: Congressional Budget Office based on data from the International Monetary Fund.Notes: For the definition of migrants’ capital transfers, see “Notes and Definitions” at the beginning of this 

document.

* = less than $50 million.

1990 1995 2000 2005 2006 2007 2008

High-Income Countries 3.6 4.7 6.0 9.7 10.8 10.2 10.7 7Low- and Middle-Income Countries 0.4 4.3 2.0 2.0 1.9 2.2 2.2 1

Europe and Central Asia * 4.0 1.3 1.4 1.4 1.4 1.4 1Latin America and Caribbean 0.1 0.1 0.3 0.3 0.4 0.5 0.6 7Middle East and North Africa * * * * * * * -15South Asia, East Asia, Pacific 0.1 0.1 0.2 0.2 0.1 0.2 0.2 -1Sub-Saharan Africa 0.1 0.1 0.1 * * 0.1 * -10

All Countries 4.0 9.0 8.0 11.7 12.8 12.5 12.9 6High-Income Countries 4.5 5.9 6.5 10.8 11.6 12.7 15.7 12Low- and Middle-Income Countries 0.9 3.7 1.8 3.1 3.4 4.5 5.3 15

Europe and Central Asia * 2.5 1.0 1.0 1.1 1.8 2.1 9Latin America and Caribbean 0.1 0.4 0.4 0.8 1.1 1.2 1.6 21Middle East and North Africa 0.7 0.7 0.2 0.5 0.5 0.6 0.9 18South Asia, East Asia, Pacific * 0.1 0.1 0.6 0.6 0.5 0.6 26Sub-Saharan Africa 0.1 * * 0.1 0.1 0.2 0.1 7

All Countries 5.3 9.5 8.3 13.9 15.0 17.2 21.1 12

Average

Annual

Change,

Outflows

Inflows

2000–2008

1990s 2000s

Percentage

In addition to the wreturning migrants amounts of financioutflows of migranestimated at almost total inflows exceedamount accounts foestimated inflows. likely to flow both income countries; ioutflows from all cincome countries, ainflows from all coucountries. By compoutflows of personahigh-income countof inflows of personcountries were to h(see Exhibit 11). CBO

Appendix: Recent Changes in the 

Classification of Remittances

In principle, the concept of remittances as international transfers of funds sent by resident migrant workers back to households in their home country is a straightforward one, but in practice, the classification of international transactions complicates the accounting of such flows. Moreover, international organizations and their member countries are in the process of updating reporting standards for the international economic accounts. As part of that transition, the International Monetary Fund (IMF) has revised its definition of workers’ remittances. The IMF used to define workers’ remittances as a standard item in its accounting system for international transactions.1 That specificity was useful, 

although the definition excluded many monetary flows involving foreign workers:

B Temporary workers who stayed or were 

expected to stay for less than a year were considered nonresident employees rather than migrants, and funds that they sent or brought home were classified as compensation of nonresident employees rather than as remittances.2

B Migrants’ financial investments in their home 

country were excluded from the definition of 

remittances, even though they were included in the IMF’s financial transactions accounts.

B Migrants’ transfers of capital upon returning to 

their country of origin were excluded altogether from the accounts for international transactions because they involve a change in status rather than a transaction between two entities.

Recently, the IMF dropped workers’ remittances as an explicit item in its accounting system, replacing it with several supplemental items that amount to a new definition of remittances.3

B Personal remittances are composed of transfers 

in cash or in kind between resident and nonresident households (referred to as “personal transfers”) and compensation of nonresident employees minus expenditures in the host economy.

B Total remittances include personal remittances 

as well as social benefits (such as social security or pension payments) paid to nonresident households.

B Total remittances a

institutions serving by charities and ot

Under the new definiinclude transfers from households, but in prresident to nonresidenmigrant workers. Althbreaks out the portion home country and thcountry, the definition financial investments their capital transfers In this document, the tances reported in Exhreported by the Bureacome closest to the IMdiffer from the IMF’s personal transfers by otion (rather than by aUnited States) and by of nonresident emploexpenditures incurred unclear whether the ddrawn from many difin Exhibits 10 througinition, the new defin

1. Moreover, the IMF also used the term “remittance” to of the two. 



refer to institutional remittances by nonprofit organizations such as religious and charitable institutions, and many countries included such flows in reported estimates of private remittances.

2. For statistical purposes, the IMF broadly defines residency 

as living or intending to live in a host country for a year or more and defines migrants as resident workers.

3. See International Monetary Fund, Balance of Payments 

and International Investment Position Manual, 6th ed. (Washington, D.C.: International Monetary Fund, 2009), pp. 272–277.