CONGRESS OF THE UNITED STATES

CONGRESSIONAL BUDGET OFFICE

A

PAPER

CBO

Remittances:

International

Payments by Migrants

MAY 2005

A Series on Immigration

© Thinkstock

The Congress of the United States O Congressional Budget Office

CBO

Remittances:

International Payments by Migrants

May 2005

A

PAPER

Preface

Foreign-born people now make up 12 percent of the population of the United States—

the highest share since about 1930. The rise in the number of recently arrived residents—

nearly half of the immigrants in the United States have arrived since 1990—has raised questions about the potential effects of immigration on labor markets and economic performance 

in general. Immigration increases the pressures for federal, state, and local government spending. However, immigrants also contribute to the economy and pay taxes. A major question is 

whether immigration has the potential to lessen the strain on the federal budget as the 

baby-boom generation retires. Another important question is how immigration to the United 

States affects the countries from which the immigrants come.

This paper, requested by the Chairman and Ranking Member of the Senate Finance Committee, is the second of several reports by the Congressional Budget Office (CBO) presenting the 

facts and research on immigration to help inform the agency’s projections of the federal budget and the economy. The paper focuses on remittances—payments sent by immigrant workers back to their home countries. It discusses how those payments are classified and estimated, 

how remittances from the United States compare with other international financial flows 

(such as exports or foreign direct investment) and with remittances from other countries, what 

channels are used to send remittances, and what effects remittances have on the United States 

and recipient countries. In keeping with CBO’s mandate to provide objective, nonpartisan 

analysis, this paper makes no recommendations.

Douglas Hamilton is coordinating CBO’s series of reports on immigration. Robert Shackleton 

wrote this paper with research assistance from Amrita Palriwala and Adam Gordon. Robert 

Dennis, Arlene Holen, Noah Meyerson, Benjamin Page, John Peterson, Monisha Primlani, 

Elizabeth Robinson, and Ralph Smith provided comments on early drafts of the paper, as did 

Michael Mann of the Bureau of Economic Analysis and Roberto Suro of the Pew Hispanic 

Center. (The assistance of external reviewers implies no responsibility for the final product, 

which rests solely with CBO.)

Janey Cohen edited the paper, and Loretta Lettner proofread it. Maureen Costantino prepared 

the paper for publication and designed the cover, Lenny Skutnik printed the initial copies, 

and Annette Kalicki and Simone Thomas produced the electronic version for CBO’s Web site 

(www.cbo.gov). 

Douglas Holtz-Eakin

Director

May 2005

Summary 1

Introduction 1

Estimates of Remittances and Related Flows from and to the 

United States 2

Who Sends Remittances and Why? 4

Methods and Costs of Sending Remittances 6

Formal Institutions 6

Informal Money-Transfer Systems 7

Effects on the U.S. and Recipient Economies 7

Appendix: Global Remittances 11

References 17

CONTENTS
vi REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Tables

1. Remittances and Related International Flows from and to the

United States 3

2. Estimated Remittances from the United States to Latin America,

by State, 2004 5

3. Remittances Compared with Other Flows for Various Regions and

Countries 9

A-1. Workers’ Total Remittances in Various Regions and Countries 12

A-2. Migrants’ Total Capital Transfers in Various Regions and Countries 15

A-3. Total Compensation of Nonresident Employees in Various Regions and 

Countries 16

Figures

1. Remittances and Other International Flows from the United States to

Developing Countries, 1981 to 2003 4

2. Remittances from the United States to Latin America, by State, 2004 6
Remittances:

International Payments by Migrants

Summary

As one of the most important destinations of world immigration, the United States has emerged as the single 

largest source of reported remittances—payments sent by 

immigrant workers to their home countries. Indeed, the 

opportunity to send remittances home is one of the important motivations for immigration. Remittances sent 

from the United States grew sixfold from $4.1 billion in 

1981 to $25.5 billion in 2003, when they accounted for 

about one-third of measured global remittances. Although remittances are very small relative to the U.S. 

economy—about 0.2 percent of gross domestic product—they are now larger than U.S. official development 

assistance. Remittances have become a significant source 

of funds for some of the developing countries that receive 

them; for dozens of countries, they exceed official foreign 

aid or foreign investment as sources of external funds. Remittances from the United States are sent largely by lowincome migrants to help finance their families’ living expenses at home. In addition, some recipients use remittances for investment purposes, contributing to development in at least some of the countries that send migrants 

to the United States. Policies that affect migration to the 

United States are thus also likely to affect remittance 

flows and the economies of recipient countries.

Introduction

Immigrants seeking economic opportunities often send 

money—referred to as remittances—home to their families. This paper reviews the available data on remittances 

from immigrants in the United States. It describes the 

population of remittance senders, the motivations that 

lead workers to send remittances and the channels that 

they use, and the economic effects of remittances in the 

United States and recipient countries. An appendix to the 

paper places the U.S. experience in perspective by describing global remittances and related international

financial flows.

The term “remittance” is used in different ways. Under 

the definition currently in use by the International Monetary Fund (IMF)—which provides the most widely used 

standard for the presentation of international statistics—

remittances are international transfers of funds sent by 

migrant workers from the country where they are working to people (typically family members) in the country 

from which they came (see International Monetary Fund, 

1993, p. 75). According to the IMF, a migrant is a person 

who comes to a country and stays, or intends to stay, for a 

year or more. Typically, remittances are frequent small 

payments made through wire transfers or a variety of informal channels—sometimes even carried by hand. The 

Bureau of Economic Analysis (BEA), which compiles the 

United States’ national and international economic accounts, classifies, estimates, and reports workers’ remittances under the heading of “current transfers” in the current account of the U.S. balance-of-payments (BOP) 

statistics. (See the appendix for an overview of the classification of remittances and related flows.)

Some analysts adopt a wider definition of remittances 

that may provide a broader view of financial transfers by 

people working outside of their native countries (see 

Ratha, 2003). For example, the definition could include 

migrants’ capital transfers, which are assets that a migrant 

brings into or takes out of the country in the process of 

migration. Such transfers are recorded as capital transfers 

in the capital account of the BOP statistics. The definition also could include compensation of employees who 

are not considered residents. Although such workers consume some of that compensation in the host country (or 

use it to pay taxes there), they also return a significant but 

unmeasured portion of it to their home countries.
2 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Estimates of Remittances and Related 

Flows from and to the United States

The Bureau of Economic Analysis does not regularly collect direct data on flows of workers’ remittances into or 

out of the United States. Instead, BEA estimates the value 

of remittance outflows using a model based on estimates 

of the foreign-born population in the United States, their 

average family income, and their propensity to remit a 

portion of that income, taking into account the effect of 

national origin, family status, age, and length of stay in 

the United States.1 The propensities to remit are based on 

surveys of legal aliens conducted around 1990. The current methodology was introduced in the early 1990s. 

That method has been used to calculate estimates back to 

1981.

BEA estimates that workers’ remittances from the United 

States grew sixfold from $4.1 billion in 1981 to $25.5 

billion in 2003, and their share of gross domestic product 

(GDP) almost doubled from about 0.13 percent to about 

0.22 percent over the same period (see Table 1). In constant-dollar terms, estimated outflows of workers’ remittances grew at an average annual rate of about 5.6 percent—much more rapidly than the foreign-born 

population, which averaged 3.8 percent growth per year. 

That rapid growth has made the United States an increasingly important source of remittances on a global scale: 

the U.S. share of global reported outflows of remittances 

grew from 17 percent in 1981 to nearly 35 percent in 

2003.2 BEA also estimates but does not regularly publish 

separate data for emigrants’ remittances to the United 

States; at $393 million per year in 2002, emigrants’ remittances were much smaller than those of immigrants 

(Bach, 2003).

The United States also estimates capital transfers by immigrants and emigrants but does not regularly report the 

data independently. Data available for 2002 indicate that 

immigrants to the United States that year brought about 

$1.1 billion of capital with them, while emigrants leaving 

took about $2.2 billion with them. Native-born Americans leaving the country transferred about $0.7 billion; 

foreign-born emigrants transferred the remaining $1.5 

billion (Bach, 2003). Migrants’ transfers into the United 

States accounted for about 10 percent of all reported inflows of remittances in 2002, and transfers out accounted 

for about 23 percent of all reported outflows.3

Compensation of foreign employees working in the 

United States for less than one year grew from $550 million in 1980 to $8.5 billion in 2003, measured in current 

dollars, while inflows from U.S. employees working overseas for less than one year grew from $80 million in 1980 

to $3.0 billion in 2003.4

 Those flows accounted for more 

than 16 percent of total global reported outflows and 

about 5.3 percent of inflows in 2003. 

Taking all three flows together—remittances, migrants’ 

capital, and compensation of employees—reported outflows from the United States in 2002 (the most recent 

year for which all three are available) amounted to $33.7 

billion (about 26 percent of reported outflows from all 

countries), while inflows amounted to $6.6 billion (about 

3 percent of the global total).

BEA does not report the national or regional origin of remittance inflows or the destination of remittance outflows from the United States. For a number of regions 

and a few countries, BEA reports an aggregate called “private remittances and other transfers” that includes net 

outflows (that is, outflows minus inflows) of remittances 

as well as other current private transfers, such as taxes and 

payments by educational, charitable, medical, philanthropic, and religious institutions.

It may be useful to note, however, that the nation that is 

probably the single most important destination of U.S. 

remittance outflows, Mexico, reported inflows of workers’ remittances (overwhelmingly, but not exclusively, 

from the United States) of $8.9 billion in 2001, $9.8 billion in 2002, $13.4 billion in 2003, and $16.6 billion in 

2004. Those values are substantially larger than BEA’s estimates of the total net flow of private remittances and

1. The estimation procedure is discussed in detail in Murad (1992).

2. The International Monetary Fund and World Bank compile estimates of remittances for nearly all countries from submissions by 

each country’s government. Those estimates are discussed in the 

appendix of this paper.

3. BEA does not report migrants’ capital transfers as separate items 

to the International Monetary Fund for inclusion in the IMF's 

international compilation of balance-of-payments statistics. 

Instead, they are included in total inflows and outflows of nonfinancial capital.

4. Those “inflows” include compensation of U.S. employees of international organizations such as the IMF and the World Bank, as 

well as U.S. employees who work for foreign embassies and consulates in the United States, even though those employees typically 

work for more than one year.
REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS 3

Table 1.

Remittances and Related International Flows from and to the United States

(Billions of current dollars)

Source: Congressional Budget Office based on data from the Bureau of Economic Analysis and the Organization for Economic Cooperation 

and Development.

Notes: Totals for outflows, inflows, and net outflows do not include transfers of migrants’ capital, which are not reported by the Bureau of 

Economic Analysis (BEA) on a regular basis. In 2002, BEA estimated that outflows of migrants’ capital were valued at $2.2 billion, 

inflows at $1.1 billion, and net outflows at $1.1 billion. 

n.a. = not available.

a. As reported by the U.S. Department of State to the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). Official development assistance (ODA) comprises grants and loans (net of repayments of principal) that 

meet the DAC’s definition of ODA and are made to countries and territories in part I of the DAC list of aid recipients. Official aid comprises 

such payments to countries in part II of the list (generally countries of the former Soviet bloc).

b. As reported by the U.S. Department of State to the DAC. Net investment includes foreign direct investment and portfolio investment.

other transfers (not just workers’ remittances) to Mexico 

of $6.4 billion in 2002 and $7.0 billion in 2003. The apparent discrepancy between U.S. and Mexican statistics 

could stem from either or a combination of two factors. 

BEA may be underestimating remittance outflows because it has not yet incorporated the results from the 

most recent decennial census into its estimate of the foreign-born population in the United States. That revision 

will probably increase BEA’s estimate of remittances. 

Conversely, the Mexican statistics may overestimate remittances. For instance, Mexican authorities may record 

some flows associated with compensation of employees 

within their estimates of workers’ remittances. However, 

the extent of any overestimate or underestimate is difficult to judge on the basis of data currently available.

1981 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003

4.1 8.4 11.8 12.9 14.1 15.6 18.3 20.5 21.5 23.1 25.5

n.a. 3.5 6.3 6.3 6.7 7.0 8.0 7.5 8.1 8.4 8.5

n.a. 11.9 18.1 19.2 20.8 22.6 26.2 28.1 29.5 31.5 34.1

n.a. n.a. 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4 n.a.

n.a. 1.2 2.2 2.2 2.3 2.4 2.7 2.8 2.9 2.9 3.0

n.a. n.a. 2.4 2.4 2.6 2.7 3.1 3.2 3.3 3.3 n.a.

n.a. n.a. 11.6 12.6 13.8 15.3 17.9 20.2 21.1 22.8 n.a.

n.a. 2.3 4.1 4.1 4.4 4.6 5.2 4.7 5.2 5.4 5.5

n.a. n.a. 15.7 16.7 18.2 19.8 23.1 24.9 26.2 28.2 n.a.

5.8 11.7 8.6 11.1 9.4 11.5 12.7 12.5 13.0 15.6 17.7

0.9 -0.5 1.5 1.1 0.3 0.6 4.7 1.4 0.5 0.2 0.8

Total Net Official Flows to Developing Countries 6.7 11.3 10.1 12.2 9.7 12.1 17.4 13.8 13.5 15.8 18.5

Net Investment plus Export Creditsb 18.7 -2.4 37.4 45.7 80.0 46.5 48.4 27.7 41.2 9.4 51.0

1.0 2.5 2.8 2.8 3.6 4.3 6.1 6.4 7.6 8.9 10.6

Total Net Private Flows to Developing Countries 19.7 0.1 40.2 48.5 83.6 50.9 54.5 34.1 48.8 18.2 61.6

Total

Total

Total

Outflows

Net Outflows (Outflows Minus Inflows)

Workers' Remittances

Compensation of Employees

Inflows

Workers' Remittances

Compensation of Employees

Net Grants by Nongovernmental Organizationsb

Official Development Assistance and Aida

Other Official Flowsa

Workers' Remittances

Compensation of Employees

Memorandum (Flows to Developing Countries Only):
4 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Figure 1.

Remittances and Other International 

Flows from the United States to

Developing Countries, 1981 to 2003

(Percentage of gross domestic product)

\\

Sources: Remittance outflows as reported by the Bureau of Economic Analysis. Official development assistance and aid as 

reported by the U.S. Department of State to the Development Assistance Committee of the Organization for Economic Cooperation and Development.

a. Net private flows include net foreign direct investment, portfolio 

investment, export credits, and grants from nongovernmental 

organizations.

b. To developed and developing countries.

In recent years, some observers have cited the potential 

for remittances to complement or even replace direct investment and foreign aid as a source of development finance (see, for example, Adelman, 2003). They argue 

that remittance flows are, in effect, a form of aid: rather 

than sending aid to a developing country, a developed 

country can allow migrants from that country to work 

and send money home. Those observers also point out 

that remittances do not directly burden a host country’s 

taxpayers in the same way that tax-financed official aid 

does; that they are less costly to get to the people who 

need them, compared with aid that passes through the 

sending and receiving countries’ bureaucracies; and that 

they have tended to be more stable during business cycles 

than investment or aid (see Addy and others, 2003; 

Kapur, 2003; and Keely and Tran, 1989). Other observers note that to the extent that migrant workers compete 

with domestic workers, and to the extent that such competition lowers domestic wages, the cost of assistance in 

the form of remittances is borne by domestic workers.

Remittances are very small relative to the U.S. economy, 

equivalent to just over 0.2 percent of GDP. They are typically smaller than net private asset flows and net grants 

by nongovernmental organizations to developing countries, although they exceeded such flows in 2002 (see 

Figure 1).5 Nevertheless, at more than $23.1 billion in 

2002, outflows of remittances from the United States 

greatly exceeded the $15.6 billion that the U.S. government provided in official development assistance and development aid to developing countries.6 Moreover, to the 

extent that remittance flows into those countries are underreported, the gap between remittances and other 

sources of external finance to developing countries may 

be larger than the official statistics indicate.

Who Sends Remittances and Why?

Nearly all of the information about remittance senders in 

the United States has to do with migrants from Latin 

America. Relatively little reliable information is available 

about remittance senders from other regions.7 However, 

the fact that more than half of the foreign-born population in the United States is from Latin America suggests 

that a large share of remittances from the United States 

goes to those countries (see Congressional Budget Office, 

2004).

1981 1984 1987 1990 1993 1996 1999 2002

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Official Development

Assistance

and Aid

Remittances b

Net Private Flows a

0

5. Those private flows amounted to $18.2 billion in 2002. That total 

included $34.3 billion of net foreign direct investment from the 

United States to developing countries, $25.6 billion of net inflows 

of portfolio (or financial) investment from those countries to the 

United States, and nearly $8.9 billion in net grants by nongovernmental organizations. Those private flows constituted 24.4 percent of all such flows from OECD member countries.

6. That value includes $13.3 billion in official development assistance to part I countries—those considered eligible for development assistance by the Development Assistance Committee of the 

Organization for Economic Cooperation and Development 

(OECD)—and $2.3 billion in official aid to part II countries—

economies in transition, including the nations of the former 

Soviet bloc and certain advanced developing countries and territories. That funding constituted 24.2 percent of all such funding 

from OECD member countries.

7. The information in this section is compiled from several studies: 

Bendixen Associates (2004), DeSipio (2000), Lowell and De la 

Garza (2000), Menjivar and others (1998), Suro (2003), and Suro 

and Bendixen (2002).
REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS 5

Table 2.

Estimated Remittances from the United 

States to Latin America, by State, 2004

Source: Congressional Budget Office based on Bendixen Associates, State by State Survey of Remittance Senders: U.S. to 

Latin America (2004).

Note: Estimates are unavailable for Alaska, Delaware, Hawaii, 

Maine, Mississippi, Montana, New Hampshire, North Dakota, 

Rhode Island, South Dakota, Vermont, West Virginia, and 

Wyoming, but remittances from those states are thought to 

be relatively small.

One recent survey conducted in early 2004 of Latin 

American immigrants living in the United States concluded that about 61 percent of all such immigrants (or 

about 10 million people) were sending home remittances, 

averaging roughly $3,000 per sender (Bendixen Associates, 2004). As with the migrant population, remittance 

senders were concentrated in a relatively small number of 

states. In 2004, nearly 68 percent of all remittances came 

from five states: California, New York, Texas, Florida, 

and Illinois (see Table 2 and Figure 2). 

The same survey indicates that remittance senders tend to 

be recently arrived, young, married men with little education, low earnings, and little familiarity with formal 

banking systems. The majority send home small amounts 

of money—a few hundred dollars—every month. Studies 

suggest that immigrants are less likely to send remittances 

(and more likely to send less money) the longer they stay 

in the United States. One study found that each year of a 

migrant’s age reduced his likelihood of remitting by about 

3 percent, and an additional year of education reduced 

that likelihood by 7 percent (Lowell and De la Garza, 

2000). A migrant household with minor children in the 

United States was 25 percent less likely to send remittances than one without, whereas a migrant with minor 

children still living in his native country was more than 

twice as likely to remit than one without.

What little information is available about remittance 

senders from other parts of the world suggests that there 

are significant differences by country of origin. For example, according to one study, immigrants who send remittances from the United States to India send an average 

amount of about $1,100; the average remittance to Pakistan is about $790, to Bangladesh about $560, to the 

Philippines about $400, and to Egypt about $300 

(Orozco, 2003).

Research on the motivations that drive workers to immigrate and send remittances suggests that a considerable 

share of all immigration is motivated at least in part by 

the opportunity to send home remittances and that migrant workers may send remittances for a variety of reasons.8

 Although they may be driven in part by altruism, 

migrants also appear to be part of family networks that 

have pooled resources to help the migrant learn skills or 

get an education, to send the migrant overseas to earn a 

State

California 9,610 32.0

New York 3,562 11.9

Texas 3,182 10.6

Florida 2,450 8.2

Illinois 1,528 5.1

New Jersey 1,371 4.6

Georgia 947 3.2

North Carolina 833 2.8

Arizona 606 2.0

Virginia 586 2.0

Colorado 544 1.8

Massachusetts 527 1.8

Maryland 500 1.7

Nevada 447 1.5

Washington 353 1.2

Oregon 218 0.7

Michigan 192 0.6

Indiana 190 0.6

Pennsylvania 180 0.6

Utah 164 0.5

Tennessee 162 0.5

Oklahoma 156 0.5

Wisconsin 152 0.5

Alabama 149 0.5

South Carolina 148 0.5

Minnesota 147 0.5

Connecticut 129 0.4

Arkansas 114 0.4

Ohio 108 0.4

Missouri 105 0.3

New Mexico 103 0.3

Idaho 96 0.3

District of Columbia 94 0.3

Kansas 94 0.3

Nebraska 80 0.3

Iowa 69 0.2

Louisiana 61 0.2

Kentucky 53 0.2

Millions of

Dollars

Percentage of

Total

8. For reviews of the literature, see Solimano (2003) and Rapoport 

and Docquier (2003). Useful studies include Chami and others 

(2003), Docquier and Rapoport (2003), Lucas and Stark (1985), 

and Roberts and Morris (2003).
6 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Figure 2.

Remittances from the United States to Latin America, by State, 2004

(Billions of dollars)

Source: Congressional Budget Office based on Bendixen Associates, State by State Survey of Remittance Senders: U.S. to Latin America 

(2004).

higher income than he could at home, or to diversify 

their risks by having a family member working in a different economic environment than the one they face at 

home. From that perspective, remittances are payments 

that are part of the informal or implicit contracts that migrants have made with other family members, rather than 

pure gifts. Instead of being an afterthought, or a side benefit of migration, remittances therefore constitute one of 

the primary purposes of at least some migration. Some research suggests that migrants may also send remittances 

in part to signal their reliability and thus enhance their 

reputation as members of both their home community 

and the migrant network where they work (see Roberts 

and Morris, 2003, p. 1252).

Methods and Costs of Sending

Remittances

Migrants send money home through a wide range of formal and informal means. Survey responses suggest that 

the majority of Latin American immigrants who send remittances do so through formal means—postal and other 

money orders, wire transfers, and banks—regulated by 

the Treasury Department through the Office of the 

Comptroller of the Currency, the Financial Crimes Enforcement Network, and the Office of Foreign Assets 

Control.9 However, many immigrants send remittances 

through a variety of informal mechanisms, which were 

much more prevalent in the past and which continue to 

dominate the market for remittances to a few countries—

Haiti, Cuba, and Nicaragua in particular.10

Formal Institutions

Providers impose charges for remittances that typically 

include both an explicit fee and an exchange rate spread, 

which together can be quite substantial. The price of 

sending remittances varies significantly, depending on 

their origin and destination. The distribution of migrants 

throughout the United States affects pricing: the cost of 

California (9.6)

New York (3.6)

Texas (3.2)

Florida (2.5)

Illinois (1.5)

New Jersey (1.4)

Georgia (0.9)

North Carolina (0.8)

Arizona (0.6)

Virginia (0.6)

All Others (5.3)

9. Bendixen Associates (2004) and Orozco (2004). No agency or 

industry systematically collects data on the various remittance 

products offered or their costs.

10. See Orozco (2004). The markets for remittances to some countries—for instance, Bolivia, Peru, Honduras, and Venezuela—are 

only beginning to develop significant competition.
REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS 7

sending remittances is lower where there is a larger immigrant community. A number of institutions that offer remittance services cater to migrants from a specific country (Meyers, 1998). The cost of remitting a given amount 

of money can vary by a factor of more than three, depending on where it is sent. One recent study found that 

for a remittance of $200, the cost ranged from about 5.4 

percent for remittances sent to Ecuador to more than 

12.1 percent for remittances sent to Cuba. For the average remittance—around $400 in that study—the cost 

varied from about 4.4 percent for Mexico to about 12.1 

percent for Cuba (see Orozco, 2004; and Suro and Bendixen, 2002). 

As the volume of remittances from the United States has 

grown, the market has attracted new entrants. A decade 

ago, remittances were often sent by money order, but the 

market is currently dominated by companies that specialize in wire transfers. In the past few years, banks have begun to compete for remittance business but are hampered 

by migrants’ lack of familiarity with, and distrust of, formal banking institutions—roughly half of all remittance 

senders to Latin America do not have a bank account 

(Orozco, 2004). Further, illegal immigrants have concerns about their legal status and documentation. As a

result of those issues, banks currently have only a small 

share—a few percentage points—of the remittance

market.

The limited information available from surveys indicates 

that with the number and range of providers rising rapidly, the price of transferring remittances has dropped 

very quickly since the late 1990s. According to one survey, the cost of sending a $200 remittance to Mexico fell 

from as much as 15 percent in the late 1990s to about 8 

percent in 2001 and about 7.3 percent in early 2004, and 

the cost of an average remittance fell to about 4.4 percent 

(see Orozco, 2004). The range of products is also increasing. Some banks, in an effort to expand their provision of 

services in immigrant communities, now offer such options as stored-value cards and the possibility of accessing 

bank accounts in the United States through automatic 

teller machines (ATMs) in developing countries (see Bair, 

2003; and Orozco, 2004).

Informal Money-Transfer Systems

Throughout the world, an estimated $100 billion to 

$300 billion of payments pass through informal moneytransfer systems (also referred to as informal funds transfers) that operate outside of the formal financial sector 

(Buencamino and Gorunov, 2002). A portion of those 

payments cross international borders. Informal systems 

include the hawala system found throughout South Asia 

and the Middle East but also in immigrant communities 

in the United States (called hundi in Pakistan and India), 

the fei-ch’ien system in China, the hui kuan in Hong 

Kong, the phei kwan or poey kuan in Thailand, the chop

and chit systems found throughout East Asia, and the 

padala in the Philippines. Those systems are similar in 

structure to the systems from which the modern financial 

system originally developed, and they evolved over the 

centuries as people with ethnic or national ties developed 

secure methods of transferring funds and settling accounts over long distances. The systems have been implicated to some degree in smuggling, money laundering, 

and other illegal activities but appear to exist primarily 

because they can process large numbers of transactions

in countries that lack fully developed formal financial

institutions.

Informal transfers depend on the personal relationships 

between two financiers living in different locations. A 

customer seeking to transfer funds to another person in 

another country gives the funds to a local financier (a

hawaladar in the hawala system), who gives the customer 

a code. The financier receives a fee or may be compensated by charging an exchange rate above the prevailing 

rate. The customer sends the code to the recipient, while 

the financier instructs another financier in the other 

country to pay the recipient upon provision of the code. 

The financiers may settle up through a financial transaction, by trading goods or services, or through a reverse 

hawala. In such a system, the entire transaction can occur 

without any component appearing in any country’s national or international accounts.

Effects on the U.S. and Recipient

Economies

Because they are so small compared with the country’s 

GDP, remittances have a negligible effect on the U.S. 

economy. To the extent that remittances reduce the purchasing power of people living in the United States, that 

value is far outweighed by migrants’ contribution to domestic production and consumption.

At a global level, remittances constitute a tiny fraction of 

economic activity, amounting to about 0.3 percent of 

gross world product in 2002 (see Table 3). For nearly all 

major source countries, moreover, remittances are minor 
8 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

flows. Nonetheless, remittances constitute a substantial 

and important source of income in a number of receiving 

countries, especially when compared with other sources 

of international finance, such as exports, foreign investment, and foreign aid.

For developing countries taken as a whole, remittance inflows from all countries in 2002 were equivalent to nearly 

1 percent of aggregate GDP. Remittance inflows were, 

however, a more significant source of resources for some 

countries, including 19 for which remittances amounted 

to more than 5 percent of the country’s GDP. They include the following Latin American and Caribbean countries, whose citizens receive the bulk of their remittances 

from migrants working in the United States:

B Haiti (20 percent of GDP),

B Jamaica (14 percent), 

B El Salvador (14 percent), 

B Honduras (11 percent), 

B Nicaragua (9 percent),

B Dominican Republic (9 percent),

B Guatemala (7 percent), and

B Ecuador (6 percent).

One data source suggests that for most of those countries, 

average annual remittances to households that receive 

them are comparable in size to the country’s average annual per capita GDP.11 The proportion of adults receiving remittances is substantial: an estimated 23 percent of 

Central Americans, 18 percent of Mexicans, and 14 percent of Ecuadorans (Suro, 2003).

Remittances to all developing countries were only about 

3 percent as large as their total exports of good and services in 2002 and thus constituted a small source of foreign exchange. However, remittances were at least 25 percent as large as exports for 20 countries, including eight 

countries in the Western Hemisphere:

B Haiti (156 percent of exports),

B El Salvador (51 percent),

B Guatemala (41 percent),

B Nicaragua (41 percent),

B Jamaica (37 percent),

B Dominican Republic (35 percent),

B Honduras (29 percent), and 

B Ecuador (25 percent).

Remittances were about 39 percent as large as foreign direct investment (FDI) for developing countries as a whole 

in 2002, and about 57 percent as large for developing 

countries in the Western Hemisphere.12 For more than 

40 developing countries, remittances were larger—and 

for most of them, much larger—than FDI, including 

nine countries in the Western Hemisphere:

B Haiti (more than 100 times larger than FDI),

B Guatemala (14 times larger),

B El Salvador (9 times),

B Honduras (5 times),

B Jamaica (235 percent),

B Nicaragua (216 percent),

B Dominican Republic (204 percent),

B Colombia (121 percent), and

B Ecuador (112 percent).

11. Inter-American Dialog (2004), citing data from World Bank 

(2003).

12. Foreign direct investment is distinguished from other types of foreign investment by the fact that a person in one country acquires a 

lasting interest in and a degree of influence over the management 

of a business enterprise in another country. 
REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS 9

Table 3.

Remittances Compared with Other Flows for Various Regions and Countries

Source: Congressional Budget Office based on data from International Monetary Fund, Balance of Payments Statistics; World Bank, World 

Development Indicators 2004; and Department of Commerce, Bureau of Economic Analysis.

Notes: N.A.= not applicable (industrialized countries do not receive official development assistance).

* =between zero and 0.5 percent.

** = Argentina received very minor official development assistance and Haiti received very minor foreign direct investment in 2002.

Developing countries, taken as a group, received about 22 

percent more foreign exchange from remittances than 

they did from official foreign aid in 2002. For developing 

countries in the Western Hemisphere, remittances were 

more than five times larger than was foreign aid, and for 

five of them—Argentina, Mexico, Jamaica, Costa Rica, 

and Dominican Republic—more than 10 times larger.

Remittances obviously improve the well-being of receiving households in the migrant’s country of origin.13

However, the overall effect of remittances on receiving 

countries’ macroeconomies is less clear-cut.14 Remit78,208 * 2 30 143

11,215 * 1 13 N.A.

66,993 1 3 39 122

8,348 1 2 24 73

7,061 1 3 233 124

6,158 1 4 61 32

19,961 1 2 26 142

 China 1,747 * * 3 118

India 8,065 2 10 266 551

Pakistan 3,554 6 32 432 166

25,465 2 6 57 549

171 * 1 22 **

2,454 3 15 121 556

234 1 3 35 4,685

1,960 9 35 204 1,248

1,432 6 25 112 663

1,935 14 51 930 831

1,579 7 41 1,436 634

676 20 156 ** 433

711 11 29 497 164

1,131 14 37 235 4,711

9,814 2 6 67 7,216

377 9 41 216 73

Region/Country

All Countries

Industrialized Countries

Developing Countries

Europe

Middle East

Africa

Asia

Goods and

Services

Foreign

Direct

Investment

El Salvador

Guatemala

Western Hemisphere

Argentina

Colombia

Costa Rica

Total Remittances as a Percentage of:

Remittances

Received, 2002

Gross

Domestic

Exports of Official

Development

Assistance

Nicaragua

(Millions of dollars) Product

Haiti

Honduras

Jamaica

Mexico

Dominican Republic

Ecuador

13. One statistical study found that a 10 percent increase in the share 

of remittances in a country’s GDP resulted in a 1.9 percent decline 

in the share of its population living on less than a dollar a day. 

Most of that effect occurred in Africa, the Middle East, South and 

Central Asia, and Eastern Europe rather than in Latin America or 

East Asia. See Adams and Page (2003).

14. Useful summaries of current research are available in Rapoport 

and Docquier (forthcoming) and Ellerman (2003).
10 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

tances can have both positive and negative macroeconomic effects.15 They provide a country’s economy with 

foreign currency, help finance imports, contribute to the 

balance of payments, and increase national income. 

However, migration reduces the labor force of the country of origin, and remittances may reduce the remaining 

family members’ incentive to work.

The available evidence from a large number of studies 

across different countries suggests that below a threshold 

level of income, recipients tend to use remittances primarily to meet pressing economic needs, such as basic consumption and health care. Once those basic needs are 

met, they may use remittance income for education and 

consumer durables, to buy land or housing, and after 

that, to pay off debts or make investments (see, for example, Lowell and De la Garza, 2000; and Sander, 2003). 

Remittances from the United States typically take the 

form of monthly low-value payments that their recipients 

use to cover basic living expenses (see Suro and Bendixen, 

2002). However, remittances spent on goods for consumption may also have a significant effect on development. For instance, a study in El Salvador indicates that 

higher remittance income seems to help keep children in 

school longer than other types of income (see Cox and 

Ureta, 2003).

Furthermore, the evidence also suggests that households 

tend to save a larger portion of remittance income than 

they do other sources of income, providing a source of 

capital for investment (see, for example, Adams, 2002). 

In at least some developing countries with poorly developed financial sectors, remittances and migrants’ capital 

contribute to a substantial portion of small-business development. Some studies show a decline in rural output 

in several countries after a period of extensive migration, 

followed by a period during which the decline was at least 

partially offset (and perhaps more than offset) by growth 

that was financed largely by remittances (see Rapoport 

and Docquier, forthcoming). 

One study indicates that remittances contributed more 

than 25 percent of the capital invested in microenterprises in Mexican cities and that they are associated with 

more than 40 percent of the capital invested in such enterprises in the 10 Mexican states with the highest rates

of migration to the United States (see Woodruff and

Zenteno, 2001).

Some evidence suggests that as workers begin migrating 

from a village, remittances may increase the degree of income inequality there, but after the village develops a 

longer history of sending migrants, remittances tend to 

reduce the degree of inequality (Stark and Taylor, 1986).

15. Extensive literature exists on the macroeconomic, growth, and distributional effects of remittances. Useful discussions include Addy 

and others (2003), Chami and others (2003), Cox and Ureta 

(2003), DeSipio (2000), Ellerman (2003), Funkhouser (1992), 

Kapur (2003), Keely and Tran (1989), Lowell and De la Garza 

(2000), Meyers (1998), Ramamurthy (2003), Rapoport and Docquier (forthcoming), Russell (1992), Sander (2003), Stark and 

Taylor (1986), Suro and Bendixen (2002), Woodruff and Zenteno 

(2001), and Yang (2004). 
Appendix: Global Remittances

For most countries, information on remittances and 

research on their effects tend to be less developed than for 

other major international flows, such as exports, investment, or foreign aid (Kapur, 2003). Data for remittances 

are sparser and less reliable than are most economic data 

for industrialized countries, as are most data on the entire 

process of international migration and on economic activity in developing countries in general.

The most extensive and consistent collection of data on 

remittances is found in the balance-of-payments (BOP) 

statistics assembled by the International Monetary Fund 

(IMF) from data contributed by approximately 160 

member countries.1 The World Bank also assembles national accounts, relying primarily on data provided by the 

IMF but also using data provided by approximately 20 

countries that belong to the World Bank but not to the 

IMF. Those collections, which provide the most comprehensive description of international transactions available, record workers’ remittances under the heading of 

“current transfers” in the current account.

The Treatment of Remittances in the 

Balance of Payments

From an economic point of view, the balance-of-payments accounts could treat flows of labor and labor income across national borders in the same way that they 

treat flows of capital and capital income. If someone invests in another country, the movement of capital is 

counted as a debit (or outflow) to the capital and financial account of the person’s home country and a credit (or 

inflow) to the account of the host country where the investment occurs; conversely, if that person repatriates his 

capital, there is a credit to the home country and a debit 

to the host country. Any income that the investment pays 

to the investor is counted as part of the current account, 

which tracks the imports and exports of goods, services, 

and income. A payment is counted as a debit to the host 

country (like an export, in effect) and as a credit to the 

home country. The income is also counted as part of the 

host country’s gross domestic product (GDP) in its national accounts, but as part of the gross national product 

(GNP) of the investor’s home country.

That approach is difficult to apply to the labor of migrant 

workers because there is no practical way of calculating 

the value that is transferred when a worker migrates from 

one country to another. As a consequence, no country 

counts the migration of workers as a flow of assets in the 

balance-of-payments accounts. Most countries count 

workers’ remittances—if they count them at all—as unilateral (or “unrequited”) transfers in the current account, 

rather than as income flows, and the income is counted as 

part of the GDP and GNP of the host country. If the 

worker is expected to stay in the host country for less 

than a year, however, any income transferred back to the 

home country is counted as an income flow rather than a 

unilateral transfer. It is also counted as part of the host 

country’s GDP but the home country’s GNP. In addition, 

if a migrant worker transfers a significant quantity of savings back to the home country, most countries count that 

flow as a capital transfer debited against the host country’s 

capital and financial account and credited to the home 

country’s, but the transfer is not counted as an income 

flow in either country’s GDP or GNP.

Trends in International Flows of 

Remittances and Related Transfers

Although the official data indicate rapid growth in global 

remittances over the past two decades, closer examination 

suggests that the existing data on global remittances are of 

such low quality that the trend is considerably less certain 

that the data indicate. According to the official data, reported outflows of remittances grew from less than $20 

billion in 1980 to more than $72 billion in 2003, or

1. Various problems with the BOP data are discussed in the annex of 

Ratha, Dilip (2003). A recent technical discussion of definition 

issues can be found in Alfieri, Havinga, and Hvidsten (2005).
12 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Table A-1.

Workers’ Total Remittances in Various Regions and Countries

(Millions of dollars)

Source: Congressional Budget Office based on data from International Monetary Fund, Balance of Payments Statistics; World Bank, World 

Development Indicators; and Department of Commerce, Bureau of Economic Analysis.

Note: n.a. = not available.

about 5.7 percent per year on average (see Table A-1). Reported inflows grew from more than $29 billion to nearly 

$78 billion during the same period, or about 4.3 percent 

per year on average. (The decline from 2002 to 2003 is 

an artifact resulting from reporting lags from many developing countries.) Developed industrialized countries accounted for 57 percent of the remittance outflows but 

only 14 percent of the inflows, whereas developing countries accounted for 43 percent of the outflows but 86 percent of the inflows. (Not counting Saudi Arabia, which 

relies heavily on migrant labor, developing countries accounted for less than 20 percent of remittance outflows.)

Part of the rapid growth in remittances, however, simply 

reflects inflation. If (where possible) remittance inflows 

are converted to recipient countries’ currencies, deflated 

using their consumer price indices, and reconverted to 

dollars using 2002 exchange rates, the results suggest that 

reported remittances grew by about 2.3 percent per year 

on average.

The fact that the aggregate reported inflows and outflows 

of remittances have become more nearly equal—that is, 

what countries report as flowing out more nearly balances 

with what countries report as flowing in—suggests that 

data collection may be becoming more accurate (or at 

least more equally inaccurate for inflows and outflows) 

over time. Nevertheless, remittance data continue to be 

incomplete. Countries use a variety of different methods 

to estimate remittance flows, and many countries do not 

record remittance inflows or outflows at all. About a 

quarter of the inflows of remittances reported in 1980 

went to countries that did not report remittances in 

2002, and about a quarter reporting in 2002 did not do 

1980 1990 2000 2001 2002 2003

19,938 35,948 57,378 60,275 67,922 72,007

10,383 19,794 34,148 36,168 38,831 43,600

United States 810 8,390 20,543 21,458 23,145 25,542

9,555 16,154 23,229 24,107 29,091 28,407

Africa 2,141 1,523 1,225 1,197 1,287 980

Asia 7 22 530 702 4,132 3,920

Europe 8 21 225 770 1,355 2,008

Middle East 6,722 13,816 19,898 20,020 20,986 20,268

Western Hemisphere 678 772 1,352 1,418 1,331 1,231

29,336 47,633 63,637 69,913 78,208 77,945

8,663 11,776 11,062 11,949 11,215 11,306

United States n.a. n.a. 353 375 393 n.a.

20,673 35,858 52,575 57,964 66,993 66,639

Africa 2,552 3,572 4,431 5,978 6,158 6,900

Asia 5,603 6,659 15,590 15,709 19,961 14,670

Europe 6,195 12,722 8,674 8,373 8,348 6,522

Middle East 5,133 8,138 5,865 6,045 7,061 6,955

Western Hemisphere 1,189 4,766 18,015 21,859 25,465 31,591

Outflows

Inflows

All Countries

Industrialized Countries

Developing Countries

All Countries

Industrialized Countries

Developing Countries
APPENDIX: GLOBAL REMITTANCES 13

so in 1980. Moreover, many countries, accounting for 

about one-fifth of the global population in 2002, did not 

report remittances in either 1980 or 2002 or reported 

zero remittances—probably indicating, in the latter case, 

that they did not collect the data. Some countries record 

remittance outflows but not inflows. As mentioned 

above, the United States did not record inflows until recently and still does not report them separately to the 

IMF.

Moreover, the BOP statistics probably undercount remittances because they record only transfers that are carried 

out through official financial channels, excluding the 

large and unknown portion that flows through unofficial 

channels (Adams and Page, 2003). One study estimates 

that 15 percent to 80 percent of remittances to Asian 

countries flow through informal systems; another study 

suggests that 28 percent to 46 percent of Mexican migrants’ remittances occur that way; and yet another recent 

study suggests that perhaps 45 percent of remittances 

flow through informal systems (Buencamino and Gorunov, 2002, p. 6).2 If correct, such estimates imply that 

global remittances are well over $100 billion per year.

In addition, there are several sets of international flows 

that are effectively remittances but are not recorded as 

such: those include in-kind transfers that are recorded as 

imports—as when a migrant worker buys airline tickets, 

an insurance premium, or school tuition for his family 

back home—or as donations to charitable organizations 

(Solimano, 2003). For all of those reasons, remittances 

are very likely larger than official records suggest, but the 

extent of the undercount is difficult to estimate.

Finally, it is very likely that some of the growth in reported remittances simply reflects improvements in measurement. Those improvements probably stem largely 

from a growing tendency for immigrants to send remittances through formal channels (such as wire transfers 

and money orders) rather than through unreported informal channels (such as money-transfer systems like the hawala in the Middle East, or even money transfers carried 

by hand). A recent study by the International Monetary 

Fund estimated that informal transfers were on the order 

of $35 billion per year during the 1980s but were only 

around $10 billion annually in recent years (El-Qorchi 

and others, 2002, cited in Sorensen, 2004). If those values are accurate, global remittances may have grown very 

little or even fallen in real terms between 1980 and 2002. 

However, so little is known about the share of remittances 

that are transferred informally that strong conclusions 

about the trend in total remittances do not seem

warranted.

Regional and Country-Level Data

At the regional and country levels, outflows and inflows 

of remittances show mixed trends that reflect different regional and national experiences (see Table A-1). A quarter-century ago, Europe (mainly France and Germany) 

was the primary source of reported remittances, with the 

Middle Eastern oil-exporting nations also a major source. 

Reported remittances from the United States were comparatively minor. Those patterns have shifted: although 

the oil exporters still attract a large number of foreign 

workers who send home sizable quantities of remittances, 

the European economies no longer experience the labor 

shortages that led them to encourage migration a generation ago (although some European countries have experienced significant inflows of migrants in the past 15 

years). In the meantime, the United States has once again 

become a major destination of migrants, as it was 

through most of its history, and in 2002 accounted for 

more than 60 percent of remittances reported by developed countries and about 34 percent of all reported remittances. Saudi Arabia accounted for another 23 percent. Those two countries alone were responsible for 

more than 57 percent of all reported remittances, and 

they and 11 other countries—six countries in Europe 

(Germany, France, Spain, Switzerland, Italy, and Russia); 

three countries in the Middle East (Kuwait, Oman, and 

Bahrain); and Japan and Malaysia—accounted for 90 

percent.

The pattern of remittance receipts has shifted, too. Remittances to European countries—developed and developing countries alike—have been relatively constant in 

nominal terms and have fallen in real terms. That reflects 

two developments. One is that the Mediterranean countries have experienced significant growth, giving their 

workers less incentive to migrate north, while northern 

European countries no longer experience the tight labor 

markets that they did a generation ago. The other devel2. Other estimates of receipts of unrecorded remittances at various 

points in time include Bangladesh, 20 percent; Korea, 8 percent; 

India, 40 percent; Egypt, 33 percent; Philippines, 50 percent; 

Pakistan, 43 percent; Sri Lanka, 13 percent; Sudan, 85 percent; 

Thailand, 18 percent; Tonga, 43 percent; and Western Samoa, 42 

percent. See Ramamurthy (2003).
14 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

opment is the collapse of Yugoslavia and the subsequent 

war, which may or may not have reduced remittances but 

certainly disrupted their measurement. Measured remittances to Middle Eastern countries, too, have been level 

in nominal terms and fallen in real terms for some of the 

same reasons. An offsetting development is the collapse of 

the Soviet bloc, which has led to migration from Eastern 

Europe and has also resulted in transfers among former 

Soviet republics—once domestic transactions—becoming international.

Other regions of the world show significant growth in reported remittances, even in real terms—particularly Asia 

and the Western Hemisphere. For the latter, remittances 

grew from less than $1.2 billion in 1980 to more than 

$25 billion in 2002 in nominal terms, with nearly all 

countries that reported remittances experiencing significant growth even in real terms. Five Latin American 

countries—Mexico, Colombia, Dominican Republic, El 

Salvador, and Brazil—accounted for more than 70 percent of reported remittances from the Western Hemisphere.

Remittances tend to make up a larger share of the economies of lower-income developing countries, but the bulk 

of remittances goes to middle-income countries.3 Viewed 

across all countries, total receipts of remittances in a particular country are strongly correlated with the number of 

its workers living abroad and the size of their wages. 

Those two factors alone explain about 90 percent of the 

international variation in reported remittance inflows.4

At that general level, higher remittances are also associated with migrants’ marital status (married workers send 

more money home to their families than do unmarried 

workers), a higher level of economic activity in the countries where the migrants are working, and the ability to 

make transfers easily. Relative wages, exchange rates, and 

relative real interest rates between the country of origin 

and that of migration do not seem to have much effect on 

the levels of total remittances between them, nor does the 

average distance of migration.

Migrants’ Capital Transfers

In addition to their remittances, returning migrants took 

home substantial amounts of financial capital (see 

Table A-2). Countries reported a total of about $1.2 billion in outflows (and $1.9 billion in inflows) of migrants’ 

capital in 1980, and about $9.7 billion in outflows (and 

$11 billion in inflows) in 2002. Reported capital transfers 

by migrants are thus roughly 14 percent as large as remittance flows and appear to have grown significantly even 

in real terms.

In recent years, a significant fraction of those capital 

transfers by migrants—roughly 30 percent to 40 percent—has come from developing countries, while 

roughly 80 percent has gone to developed industrialized 

countries. Thus, relatively little of the recorded total—

roughly 20 percent at most—can be attributed to workers 

in developed countries moving financial resources back to 

their native countries.

Compensation of Nonresident

Employees

Finally, compensation of nonresident employees—that is, 

payments to workers expected to stay in the host country 

for less than a year—grew from $9.8 billion in 1980 to 

$50 billion in 2002, measured as inflows into receiving 

countries (see Table A-3).5 Outflows from sending countries—including compensation of employees of international organizations—amounted to $52.9 billion in 

2002. International organizations and developing countries each accounted for about 15 percent of that total; industrialized countries accounted for the remaining 70 

percent (or $36.7 billion). Furthermore, at least half of 

the flows reported to developing countries in 2002 must 

have involved compensation in developed countries of 

short-term employees from developing countries.

Altogether, countries reported $130.5 billion worth of 

outflows and $138.6 billion of workers’ remittances, migrants’ capital transfers, and compensation of employees 

in 2002. Very roughly speaking, developed countries accounted for two-thirds of the outflows and one-third of 

the inflows, while developing countries accounted for 

one-third of the outflows and two-thirds of the inflows.

3. For more extensive discussions of remittances as a source of 

financing to developing countries, see Gammeltoft (2002), Ratha 

(2003), Sander (2003), and Solimano (2003).

4. The correlates of remittances are discussed in detail in Ramamurthy (2003), Rather (2003), Buencamino and Gorunov (2002), 

and Kapur (2003).

5. The category is referred to in the balance-of-payments accounts as 

“compensation of employees” but should not be confused with the 

similarly named category in the national income and product 

accounts, which includes compensation of resident employees. 

The balance-of-payments category also includes compensation of 

some employees who typically work for more than one year, such 

as those who work for international organizations.
APPENDIX: GLOBAL REMITTANCES 15

Table A-2.

Migrants’ Total Capital Transfers in Various Regions and Countries

(Millions of dollars)

Source: Congressional Budget Office based on International Monetary Fund, Balance of Payments Statistics; and Department of Commerce, 

Bureau of Economic Analysis.

Note: n.a. = not available.

1980 1990 2000 2001 2002 2003

1,167 3,975 7,782 8,787 9,739 7,418

801 3,277 5,309 5,877 6,790 4,231

United States 120 n.a. n.a. n.a. 2,199 n.a.

365 698 2,472 2,910 2,949 3,187

Africa 224 115 97 74 66 62

Asia 58 452 863 915 1,286 1,561

Europe 3 0 1,339 1,383 1,383 1,350

Middle East 0 0 0 0 0 0

Western Hemisphere 81 131 174 538 215 213

1,941 5,313 8,240 10,062 11,009 9,941

1,485 4,458 6,426 8,554 9,277 8,226

United States 260 n.a. n.a. n.a. 1,089 n.a.

456 855 1,813 1,508 1,731 1,715

Africa 68 56 29 25 29 45

Asia 17 26 185 122 234 194

Europe 37 0 1,030 702 752 712

Middle East 296 712 207 262 202 202

Western Hemisphere 38 62 363 397 515 562

Outflows

Inflows

All Countries

Industrialized Countries

Developing Countries

All Countries

Industrialized Countries

Developing Countries
16 REMITTANCES: INTERNATIONAL PAYMENTS BY MIGRANTS

Table A-3.

Total Compensation of Nonresident Employees in Various Regions and Countries

(Millions of dollars)

Source: Congressional Budget Office based on International Monetary Fund, Balance of Payments Statistics; and Department of Commerce, 

Bureau of Economic Analysis.

Note: n.a. = not available.

a. Compensation of employees working abroad for international organizations.

1980 1990 2000 2001 2002 2003

n.a. 31,143 47,060 53,548 52,874 n.a.

9,804 26,083 40,520 46,411 44,777 51,938

7,888 23,220 32,675 38,323 36,654 42,999

United States 550 3,460 7,519 8,086 8,380 8,533

1,916 2,864 7,845 8,088 8,123 8,939

Africa 1,241 1,297 1,121 939 911 844

Asia 78 531 1,416 1,637 1,861 2,149

Europe 7 16 1,447 1,902 2,133 3,061

Middle East 265 877 3,390 3,106 2,706 2,376

Western Hemisphere 325 143 471 504 512 509

n.a. 5,060 6,540 7,137 8,097 n.a.

9,825 24,516 43,888 48,245 49,629 57,199

6,660 19,215 28,067 32,981 32,365 37,205

 United States 80 1,170 2,835 2,931 2,938 3,031

3,165 5,300 15,821 15,264 17,264 19,994

Africa 541 919 955 827 802 608

Asia 949 2,962 9,062 8,672 10,438 11,921

Europe 70 21 2,661 2,923 3,368 4,667

Middle East 899 485 1,302 891 492 501

Western Hemisphere 707 914 1,841 1,950 2,164 2,296

Outflows

Inflows

All Countries (including international 

All Countries

Industrialized Countries

Developing Countries

International Organizationsa

All Countries

Industrialized Countries

Developing Countries

organizations)
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