Measuring migrants’ and temporary worker remittances in balance of payments statistics Poland – a case study Paweł Michalik National Bank of Poland International Technical Meeting on Measuring Migrant Remittances, January 24-25, 2005
Measurement of remittances for balance of payments statistics in Poland Central Bank approach • To measure money flows • To ask intermediary (bank) about officialmoney transfers • To follow other money flow (banknotes)
Information provided by banks about cross border payments related to: • Compensation of employees • Workers’ remittances
Compensation of employees • Inflow – compensation of Poles (residents) working for nonresidents (abroad and in Poland). In practice we measure this part of compensation which is officiallytransferred to Poland. • Outflows – compensation of nonresident workers employed by Polish (resident) entities.In practice it constitutescompensation flows to nonresident’s accounts in Polish banks.
Workers’ remittances • Inflows –moneysend by nonresidents of Polish origin (migrants) to their families in Poland. In practice we asks commercial banks about money send from abroad to “special” residents foreign currency accounts. • Outflows – money send by residents of foreign origin to their families abroad.
We focus our attention on workers’ remittance flows • Reason – long lasting constant inflow of money • Information about official money transfers is not sufficient • Approach taken – to follow foreign banknotes transaction in Poland
System of monitoring cash (foreign currency banknotes) transaction of Polish banks Information available: • Amount of foreign banknotes purchased from/sold to individual clients • Amount of foreign banknotes put on/withdrawn from special foreign currency accounts • Total net amount of inflow/outflow of foreign banknotes
Assumption: holdings of foreign banknotes by households are stable This total net amount = result of balance of payments transactions • estimation of travel • estimation of shuttle trade = estimation of net workers remittances
Cross checked/corrected by stability analyses • Cross checked/corrected by migrant statistics • Geographical breakdown is based on migrant’s statistics (similarly to Ann Harrison paper)
Existing weaknesses of measurement remittances in balance of payments statistics • Compensation of employees are underrecorded • Underrecording of outflows (debits) • Introduction of reporting threshold in the amount of € 12500 for banks due to EU legislation has significant negative impact on data (from January 2004)
Possible way forward New system has to be created • Compensation of employees • Estimation may possibly by based on administrative data and/or households survey • Outflows - own administrative data • Inflows - information from other countries • Workers’ remittances • Estimation based on migrants statistics • Households survey