In some countries migrant workers are sending more money home this year. That may be a bad sign

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MIGRANTS LIVING in countries with high rates of covid-19 have had an especially hard year. Across the rich world, unemployment among foreign-born workers has risen faster than among the rest of the population. Migrants are more likely to work in industries worst affected by the pandemic, such as hospitality and construction. In America, employment among migrants fell by 21% in April compared with February; for native-born workers the drop was just 14%. Their misfortune has a knock-on effect. One in nine people around the world rely on the money that migrant workers send home, according to the United Nations.

In April the World Bank predicted that these remittances would fall by 20% this year compared with 2019. That would be four times the percentage drop in 2009 caused by the global financial crisis. But last month the bank made a correction. Remittances to lower- and middle-income countries will shrink by only 7% this year, it now reckons. In Latin America, the amount will barely budge, falling by 0.2%. Why have remittances held up so well?

Latin American countries that depend on emigrant income—it is equivalent to 21% of El Salvador’s GDP, for example—report that monthly remittance flows have not only recovered since April, but have been higher than a year ago (see chart). The money has been sent mainly by migrants in America and Spain; those in other countries sent comparatively little. The reasons for the increase are various. Many migrants’ incomes were propped up by stimulus cheques or benefits. As the dollar and the euro held up, Latin American currencies withered. Bad times back home may have encouraged migrants to send more money while the conversion rate was good. More are taking advantage of digital services to send money too, which are cheaper and easier to track than traditional money transfers.

Migrants are also, either by decision or necessity, returning home in greater numbers. Precise data are not yet available, but the International Organisation for Migration, a UN body, estimated over the summer that around 3m migrants were stranded around the world. As travel restrictions have been lifted, the World Bank has noted a surge in the numbers going home. Some have sent the last of their savings before making the trip, which could explain the sharp rise in remittances to Mexico in March. Or, more bleakly, if migrants have died of covid-19, their savings may have been sent by others on their behalf: Hispanics account for about 15% of the more than 270,000 victims in America, according to the Centres for Disease Control and Prevention.

Although remittances to Latin America have held up over the past few months, the World Bank thinks this trend is unlikely to last into the new year. It expects the total to fall by 8.1% in 2021, mainly because of weak employment prospects. That is a steeper drop than the 7.5% it forecasts for the world as a whole. If the bank proves right, Latin American migrants, and their relatives back home, will have coped well with this crisis only to face a new one.

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