As we reflect on the post-pandemic era, the global COVID-19 crisis that began in early 2020 and gradually subsided around 2022 stands out as a transformative period that reshaped our world. Its profound impact touched every aspect of our lives, from societal norms to economic structures, and even our daily routines. One of the most striking changes was the unprecedented restriction on our mobility, a stark contrast to the freedom of movement we had previously taken for granted.
The movement of people, both within and across borders, has been a fundamental force shaping our world throughout history. Migration has played a crucial role in demographic shifts, economic development, cultural exchange, and the formation of diverse societies we see today.
This post is the first in a series exploring the impact of the COVID-19 pandemic on migrant remittances. In this initial analysis, we examine why migrants and remittances are crucial to the global economy and how the pandemic affected these financial flows. We use data on new COVID-19 cases to provide context for the changing remittance patterns observed during this period.
International migrants have long constituted a substantial portion of our global population. According to the latest data published by the International Organization for Migration (IOM), international migrants represented 3.6% of the world's population in 2020, amounting to an estimated 281 million individuals.
Asia stands as the largest source region for international migrants, with its lead widening significantly since 2010 (Figure 1). Europe follows as the second-largest origin, showing a marked increase, particularly from 2015 to 2020. Africa and Latin America and the Caribbean have seen notable growth, with Africa overtaking Latin America around 2010. In contrast, Northern America and Oceania have contributed smaller, relatively stable numbers of migrants. This upward trend across all regions, particularly accelerating in recent years, underscores the growing significance of international migration in shaping global demographics and socioeconomic landscapes.
Figure 1. Number of International Migrants by Origin Region (1990-2020)
Source: United Nations
The landscape of international migration has undergone significant changes from 1990 to 2020, as evidenced by the trends in both origin and destination countries. As of 2020, India emerged as the leading origin country for international migrants, with its migrant population showing substantial growth over the three decades. Other Asian countries also feature prominently among the world's top 10 migrant-sending nations. Mexico, while remaining the second-largest source, has leveled off in recent years. China has seen steady growth, becoming the third-largest origin country. Notably, Syria experienced a sharp rise in outward migration, likely due to the civil war that began in 2011. Countries like Bangladesh, Pakistan, and the Philippines have maintained significant and growing migrant populations throughout this period.
Figure 2. Trends in Number of International Migrants of Top 10 Origin Countries (1990-2020)
Source: United Nations
The destinations for these migrants are primarily concentrated in North America, the Middle East, and Europe. The United States consistently remains the top destination, showing substantial growth over the three decades. Germany and Saudi Arabia have seen significant increases, especially since 2010, emerging as the second and third most popular destinations respectively by 2020. The Russian Federation, while starting as the second-largest host in 1990, has maintained a relatively stable migrant population. The United Arab Emirates has experienced rapid growth, particularly after 2005, becoming a major destination. Other countries like the United Kingdom, France, Canada, Australia, and Spain have all shown steady increases in their international migrant populations.
Figure 3. Trends in Number of International Migrants in Top 10 Destination Countries (1990-2020)
Source: United Nations
These trends reflect complex global dynamics, including economic opportunities, political instabilities, and changing immigration policies. The rise of Middle Eastern countries as major destinations, alongside traditional immigrant-receiving nations, highlights the evolving nature of global migration patterns.
South Korea: A Unique Player in the Global Remittance Landscape
While the statistics on international migrant stocks are available up to 2020, coinciding with the onset of the global pandemic, we can examine specific case studies to understand how the flow of international migrants changed during the pandemic. South Korea presents a particularly relevant case, not only because SentBe is based there but also due to its significant position in global outbound remittance volumes.
The global landscape of remittances closely mirrors the patterns of international migration. As Figure 4 illustrates, the top remittance-sending countries largely align with the major migration destination countries highlighted earlier. The United States stands out as the largest remittance source by a significant margin, reflecting its status as a primary destination for global migrants. Following the US are Saudi Arabia and the United Arab Emirates, underscoring the importance of Middle Eastern countries as major sources of remittances, likely due to their large expatriate workforces. This correlation is not surprising, given that remittances, as defined by the World Bank, are transfers between resident and non-resident individuals.
Interestingly, South Korea presents a unique case in this global context. While it ranks 39th as a migration destination country, it holds the 15th position among the world's top 20 remittance source countries in 2020 (Figure 4), sending $9,684 million in remittances. This disparity suggests that while the inflow of international migrants to South Korea is relatively small, the migrants who do reside there transfer substantial funds to their home countries. South Korea's position as the 5th highest remittance source in Asia, behind only Middle Eastern countries and China, further emphasizes its significant role in global remittance flows despite its relatively smaller migrant population.
Figure 4. World's Top 20 Remittance Source Countries (2020)
Source: World Bank
South Korea's position in the global remittance landscape is particularly noteworthy given its demographic composition. Historically an ethnically homogeneous nation, foreigners constituted only 3.3% of South Korea's population in 2020. However, the country faces unprecedented demographic challenges. South Korea is grappling with rapid population aging and, most alarmingly, the world's lowest birth rate. According to OECD data, while the average Total Fertility Rate (TFR) across OECD countries was 1.5 children per woman in 2022, South Korea's rate plummeted to an estimated 0.7 children per woman in 2023 – far below even low-fertility countries like Italy and Spain (1.2 children per woman).
The most pressing concern stemming from these demographic trends is the looming shortage in the labor force, which poses a significant threat to South Korea's economic vitality and future growth prospects. As the working-age population shrinks, many industries, particularly those requiring manual labor or facing difficulty in attracting domestic workers, are experiencing acute workforce shortages.
In response to these challenges, the Korean government enacted the Act on the Employment, etc. of Foreign Workers in 2003 and introduced the Employment Permit System (EPS) in 2004. The EPS aims to address labor shortages and combat issues such as corruption in worker recruitment, illegal employment, and human rights violations. To date, 17 countries have signed bilateral agreements under the EPS framework, primarily located in Southeast and South Asia.
The impact of the EPS was evident in the decade preceding the COVID-19 pandemic, with a steady increase in the annual influx of migrant workers to South Korea. However, the pandemic dramatically altered this trend. In 2020, new arrivals of migrant workers in South Korea plummeted by 72% to 41,992 from 151,116 in 2019, followed by a further 60% decrease to 16,732 in 2021.
Figure 5. Incoming Migrant Workers in Korea (2012-2021)
Despite this sharp decline in new arrivals, the total number of migrant workers residing in South Korea remained relatively stable (Figure 6). Prior to 2020, this figure consistently hovered around 270,000. The slight decrease observed in 2020-2021 suggests that many existing migrants chose to remain in South Korea despite the pandemic's challenges.
Figure 6. Residing Migrant Workers in Korea (2012-2021)
Several factors contribute to this stability, including the job security provided by the EPS and the overall appeal of South Korea's employment opportunities. This resilience in the migrant population has significant implications for remittance flows, suggesting that even during the pandemic, the majority of migrant workers in Korea maintained their ability to send remittances.
Unveiling the Data: COVID-19's Impact on Remittance Patterns
To gain deeper insights into remittance patterns during the COVID-19 pandemic, an analysis was conducted using SentBe's proprietary dataset. This dataset comprises 96,675 migrant worker users from 14 countries, covering 3,307,185 transactions from January 2020 to April 2024. The 14 countries were selected based on the EPS partner countries, with three countries excluded due to missing data on either Covid-19 or SentBe Transactions.
The COVID-19 new case statistics from the World Health Organization (WHO) provide context to the remittance trends. The pandemic's global impact is clearly visible in the data (Figure 7). New cases show a distinct bell curve pattern, starting low in early 2020, increasing rapidly to peak around late 2021 to early 2022, and then gradually declining through 2024.
Prior to this analysis, it was hypothesized that migrant workers might increase remittances as Covid-19 cases rose in their home countries, aiming to support their families during the crisis. This assumption is supported by some academic literature. For instance, Kakhkharov (2021) found that remittances to Uzbekistan increased during the pandemic, acting as a form of insurance for receiving households. Similarly, Quayyum and Kpodar (2020) noted that remittances demonstrated resilience during the COVID-19 crisis, potentially due to migrants' altruism towards families facing hardships.
However, our analysis reveals an intriguing pattern that challenges initial expectations. The chart shows no strong direct correlation between new Covid-19 cases and remittance amounts, contrary to the hypothesis that migrant workers would significantly increase remittances as Covid-19 cases rose in their home countries. This finding aligns with several recent academic studies, suggesting a more complex relationship between the pandemic and remittance flows.
Shimizutani and Yamada (2021), in their study of remittances to Tajikistan during the pandemic, found that "remittance receipts were not significantly affected by the spread of COVID-19 in the destination country." Instead, they observed that remittance patterns were more influenced by factors such as economic conditions in host countries and exchange rate fluctuations. This supports our observation that the mere increase in COVID-19 cases did not directly translate to increased remittances.
Similarly, Kpodar et al. (2021) analyzed remittance flows to Sub-Saharan Africa during the pandemic and noted that "the number of COVID-19 cases in the host country does not seem to affect remittance inflows significantly." Their research suggests that other factors, such as fiscal stimulus measures in host countries, played a more crucial role in maintaining remittance levels. This finding resonates with our data, which shows remittance resilience despite fluctuating case numbers.
Interestingly, Dinarte et al. (2022) found that formal remittances to El Salvador actually increased during the pandemic. However, this increase was not directly correlated with COVID-19 case numbers. Instead, they attribute this rise to a shift from informal to formal remittance channels due to mobility restrictions. This observation highlights the importance of considering changes in remittance mechanisms when interpreting pandemic-era data.
These studies, along with our findings, underscore that the relationship between COVID-19 cases and remittance flows is not straightforward. While remittances have shown resilience during the pandemic, the drivers of this resilience appear to be complex and multifaceted, extending beyond a simple response to increased case numbers in home countries. Factors such as economic conditions in host countries, exchange rate fluctuations, shifts in remittance channels, and government policies likely play significant roles in shaping remittance patterns during crises.
This complexity in remittance behaviors during the pandemic emphasizes the need for nuanced analysis and policy approaches. It suggests that supporting remittance flows during global crises may require a multifaceted strategy that goes beyond addressing health concerns alone. Future research could focus on disentangling these various factors to better understand and support the resilience of remittance flows in times of global upheaval.
The remittance data shows significant variations from day to day. On the lowest day, only USD 11 was sent, while on the busiest day, over USD 9 million was transferred. However, these extremes are rare. A typical day sees about USD 30,886 in remittances (the median value). Interestingly, the average daily remittance is much higher at USD 164,404. This difference tells us that while most days have moderate remittance amounts, there are occasional days with very high transfers that pull the average up. Most days (50% of them) have total remittances between USD 4,056 and USD 160,122.
This suggests that remittance behavior among migrant workers has been resilient, showing a gradual increase even as the pandemic situation evolved. The remittance trend appears less affected by the pandemic's peaks and valleys, indicating other factors may have a more significant influence on remittance patterns.
Figure 7. SentBe migrant users' transaction amount over the COVID period
Source: SentBe, WHO
Analyzing the dataset further reveals distinct clusters of countries based on their remittance behavior and Covid-19 dynamics. Three clusters emerge, each with unique characteristics:
Cluster 1: Diverse Remittance Patterns Amid Declining COVID-19 Cases
This largest cluster, comprising 11 out of the 14 countries studied, reveals diverse remittance behaviors despite a common trend of declining COVID-19 cases. It can be further subdivided into seven distinct groups based on their remittance patterns, ranging from growing remittances in countries like Bangladesh, Cambodia, and Nepal to more complex patterns in others.
Growing Remittances: Bangladesh (BD), Cambodia (KH), and Nepal (NP)
This group shows a clear upward trend in remittances, contrasting with the declining COVID-19 cases. The increase in remittance flows, despite improving pandemic situations, could indicate growing economic opportunities for migrant workers, increased need for financial support in home countries, or improved remittance channels. Cambodia shows the most pronounced growth, followed by Nepal and Bangladesh.
Source: SentBe
Stable Remittances: Indonesia (ID), Pakistan (PK), and Philippines (PH)
These countries exhibit remarkably stable remittance trends throughout the observed period, with slight increases over time. Despite the fluctuations and overall decline in COVID-19 cases, remittance flows remain consistent, with minimal variation. This stability suggests robust remittance systems and possibly a strong economic resilience among migrant workers from these nations.
Source: SentBe
Delayed Impact: Myanmar (MM)
Myanmar displays a unique pattern where both COVID-19 cases and remittances show a rise and fall, but with different timing. COVID-19 cases (pink line) peak earlier and then decline, while remittances (blue line) show a delayed peak that occurs after the COVID-19 peak. Both trends eventually decline towards the end of the period shown. This pattern suggests a lagged effect of the pandemic on remittance flows, possibly indicating a delayed economic impact on Myanmar's migrant workers or their host countries. The remittance peak following the COVID-19 peak could reflect increased financial support sent home as the health crisis eased but economic challenges persisted.
Source: SentBe
Complex Relationship: Mongolia (MN)
Mongolia exhibits a complex relationship between COVID-19 cases and remittances over time. The COVID-19 cases (pink line) show two distinct waves - a larger one at the beginning of the period followed by a significant decline, and then a smaller wave towards the end. Remittances (blue line) display a more gradual but overall increasing trend throughout the period, with some fluctuations.
Source: SentBe
Stable Remittances with Slight Recovery, Declining COVID-19 Cases: Kyrgyzstan (KG)
Kyrgyzstan shows a relatively stable remittance trend (blue line) with a slight U-shape pattern. There's an initial gentle decline in remittances, followed by a period of stability, and then a slight increase towards the end of the period. Meanwhile, COVID-19 cases (pink line) show a consistent and significant decline throughout the entire period. This pattern suggests a resilience in remittance flows despite the pandemic's impact, with a potential recovery or growth in remittances as COVID-19 cases decreased. The stability and eventual uptick in remittances, contrasted with the sharp decline in COVID-19 cases, could indicate that remittance flows were not strongly correlated with the direct health impacts of the pandemic in Kyrgyzstan.
Source: SentBe
Substantial Increase: Uzbekistan (UZ)
Uzbekistan's remittances show a strong upward trend as COVID-19 cases decline. This inverse relationship suggests economic recovery or changes in migration patterns leading to increased remittance flows. New COVID-19 cases dropped sharply from 2021 to mid-2022, then remained low. Meanwhile, remittance amounts rose dramatically, especially from late 2022 onward, increasing by approximately two orders of magnitude by the end of the period shown.
Source: SentBe
Mirrored Decline: Sri Lanka (LK)
Sri Lanka presents a unique case where remittance trends seem to mirror the decline in COVID-19 cases. This parallel decline suggests a possible direct relationship between the pandemic's impact and remittance flows, potentially reflecting economic challenges in both host and home countries.
Source: SentBe
These varied patterns within Cluster 1 highlight the complex interplay between the pandemic and remittance behaviors. While all countries in this cluster experienced declining COVID-19 cases, their remittance trends diverged significantly. This diversity underscores the importance of considering country-specific factors beyond the pandemic itself, such as economic policies, labor market conditions in both home and host countries, and the resilience of remittance systems.
The stability or growth in remittance trends for many countries in this cluster, despite the pandemic, demonstrates the crucial role of remittances as a source of financial support during global crises. It also suggests that migrant workers from these countries may have been able to maintain their economic activities or found new opportunities as the pandemic situation improved.
This analysis reveals that the relationship between COVID-19 and remittance flows is far from uniform. It emphasizes the need for tailored approaches in understanding and supporting remittance flows for each country, considering their unique economic, social, and policy contexts.
Cluster 2: Resilient Remittance Growth Amid COVID-19 Waves in Southeast Asia
Despite these challenges, both nations maintained substantial remittance flows, though at markedly different scales. Thailand's remittances are measured in millions, while Vietnam's are in billions, making direct comparisons of absolute values problematic. The remittance trends differ between the two countries:
Thailand showed rapid initial growth in remittances, followed by a plateau or slight decline towards the end of the period. This pattern suggests initial resilience but potential challenges in sustaining growth.
Vietnam displayed more volatility in its remittance trend, with an initial increase, followed by a dip, and then another rise towards the end of the period. This ended with a clear upward trend, indicating recovery and growth despite fluctuations.
Source: SentBe
These varied patterns of remittance flows, amidst significant COVID-19 waves, suggest complex economic dynamics rather than uniformly strong growth. They indicate that overseas workers continued supporting their home countries throughout the crisis, though the patterns differ. The remittance trends might reflect a combination of factors including government policies, global economic conditions, and the specific situations of migrant workers from each country.
Without comparative data from other countries, we cannot definitively state that these two have the highest positive remittance slopes in the dataset. However, their ability to maintain substantial remittance inflows during a global health crisis does suggest some degree of economic resilience and adaptation to pandemic challenges.
Cluster 3: High Impact with Complex Remittance Patterns
China, the sole country in Cluster 3, presents a unique case in our analysis of COVID-19 impacts on remittance flows. The data reveals a complex interplay between pandemic surges and economic resilience, setting China apart from the patterns observed in Clusters 1 and 2.
China's COVID-19 case trend shows a delayed but significant impact. The country maintained low case numbers until early 2022, followed by a sharp spike around March-April 2022, reaching over 100,000 daily cases. This initial surge was followed by a decline and then another wave in late 2022/early 2023. This pattern contrasts starkly with Cluster 1's generally declining cases and Cluster 2's earlier peaks.
Source: SentBe
Remittance flows in China demonstrate a gradual increase over time, contrary to the initial description of stability or slight decline. The remittance trend line shows consistent growth from the beginning of the period to the end, albeit with high volatility and significant fluctuations. Remittances generally range from about 100 to over 10,000,000 units on the logarithmic scale.
The relationship between COVID-19 cases and remittance flows in China is less clear-cut than in some countries from the other clusters. Remittances remained relatively stable despite dramatic fluctuations in case numbers, suggesting a degree of economic insulation from the health crisis.
This unique pattern in Cluster 3 highlights China's distinct experience: delayed but severe COVID-19 outbreaks coupled with generally increasing remittance flows, albeit with a slightly declining growth rate. It underscores the complex factors at play in the interrelation between public health crises and economic indicators, particularly in a large and diverse economy like China's.
Beyond the Pandemic: Implications for the Future of Remittances
As we've seen in this initial analysis, the COVID-19 pandemic had complex and varied effects on remittance flows across different countries. While some nations experienced declines, others showed remarkable resilience or even growth in remittance volumes. These patterns suggest that remittances played a crucial role as a financial lifeline during the crisis, often defying expectations based solely on pandemic severity.
In our next post, we'll explore how these remittance trends correlate with changes in mobility patterns. This will help us understand whether reduced movement necessarily led to decreased remittances, or if other factors came into play. By combining SentBe's unique remittance data with Google's Mobility Index, we aim to paint a more comprehensive picture of how the pandemic reshaped the financial behaviors of migrant workers.
Stay tuned for the next blog post in this series, where we'll uncover more insights into the intricate relationship between mobility, remittances, and global crises.
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