Remittances data in UK BoP

Methodology, data sources and weaknesses

Structure and scope

• UK data published and its weaknesses• Source data availability issues and constraints• Methodology for UK estimates• Other potential data sources (mostly debits) and

methodological improvements• Mainly consider current transfers but also the data

and methodology for compensation of employees (CoE) and migrant’s transfers, which are sometimes grouped with remittances.

UK’s published remittances data

• UK do not publish separate data for workers remittances within current transfers debits or credits for quality reasons.

• Combined with data for NPISH transfers on both sides.

• Hence no UK data in the IMF BoP Statistics Yearbook

• UK publish geographic breakdown at the level of total current transfers although this is produced using breakdown of lower level components.

UK data for remittances (Pink Book 2004) £bn

2001 2002 2003Compensation ofEmployees

1.1 1.1 1.1Other receipts ofhouseholds

2.7 2.7 2.7Migrantstransfers

2.3 1.9 1.9 Total Credits 6.1 5.7 5.7Compensation ofEmployees

1.0 1.1 1.1Other paymentsby households

3.4 3.5 3.8MigrantsTransfers

1.3 0.6 0.5Total Debits 5.8 5.2 5.4

Comments on UK Published data

• Around 12% of credits and 75% of debits in the other receipts/payments to households are worker remittances rather than NPISH transfers.

• DfID commissioned report for the G7 Finance Ministers suggested BoP estimates of debits overestimated.

Data source constraints

• No exchanges controls system in UK since 1979.• No transactions-based or direct reporting system in

the UK.• No other data sources within the Banking or wider

financial sector.• No information on expenditure form population

statistics.

UK methodology - Credits

• Workers remittances mainly projected forward on the basis of IMF BoP Yearbook counterparty data.

• For most countries in most years a percentage of the country total that goes to UK is estimated.

• NPISH transfers’ data projected forward from an ONS survey to charities in 1995.

• Compensation of employees and Migrants transfers data based on the ONS frontier survey.

• CoE also use estimates for USAF and embassies in the UK based on benchmark surveys.

• All data sources have a geographic breakdown.

UK methodology - Debits

• Workers remittances partly based on historic counterpart information from India, Pakistan, Bangladesh Sri Lanka and Israel.

• For other countries (and legacies) based on exchange control data projected forward using personal disposable income.

• An estimate for gifts via the postal services is based data from the UK postal service in 1992.

• All these data are broken down geographically using information on country of origin from the 1991 Population Census.

UK methodology - Debits continued

• Non-profits transfers’ data project forward from an ONS survey to charities in 1995 supplemented by information from the UK development department

• Compensation of employees and Migrants transfers information based on frontier survey.

• For compensation of employees this is supplemented with data for staff employed locally by UK Government departments.

• All the data sources on this page have a geographic breakdown.

Other potential sources for UK debits data

• Use of UK general household survey has a question which asks for expenditure on money sent abroad. (But this question has a small sample response.)

• Better use of ethnicity data from population statistics. (The DfID-commissioned report highlighted a number of ways in which these could be used combined with data on average remittances.)

• Use of data from DfID household surveys in the UK’s G7 remittance country partners - Nigeria and Bangladesh.

Other potential sources for UK debits data

• Use of the ONS’s frontier survey to get information on remittances as well as CoE and migrants transfers.

• Use of data from Customs on money transfer businesses.

• Better and fuller use of counterparty data. (Applies to Credits as well.)