Estimates of Remittances in the Czech Republic

1. Agenda item 7 Issue paper 13 Estimates of Remittances in the Czech Republic

2. The presentation consists of: • overview of the migration from/to the Czech republic • estimate of foreigners’ labour in the Czech Republic and remittances to their countries of origin • estimates of the number of foreigners working in the Czech Republic • estimates of their income • estimates of their expenses for final consumption in the Czech Republic • estimates of remittances to their countries of origin

3. Overview of the migration from/to the Czech Republic: • Emigration • mainly politically motivated - 1948, 1968-70 • economically motivated - beginning of 90-th • Immigration • 70-th and 80-th - governmental agreements • end of 90-th – up to now (now 5-7% of total workers

4. Estimate of remittances from the Czech Republic why not via formal financial system? not full coverage of all transactions gives a mixture of tourists’ and migrant workers’ money transfers developed a statistical approach – accepts different requirements: SNA - differentiation between primary and secondary income I/O tables – commoditiy structure of consumption (exports) of short-term migrants BoP - territorial divisionaccording to the main groups of countries

5. Four stages of statistical estimate of remittances Estimate of the number of foreigners working in the Czech Republic Estimate of their income Estimate of their expenses for final consumption in the Czech Republic Estimate of remittances to their countries of origin

6. Main data sources: Alien police (residence permits) Employment bureau (work permits) Trades licensing offices (trade licenses) Alien police (expatriated foreigners) Needful structure of data: country of origin employees or entrepreneurs work legally or illegally have additional job or not purpose and duration of their stay alone or not Number of foreigners working in the Czech Republic

7. Numbers of foreigners working in the Czech Republic, 2006

8. Employees special statistical survey structured according by countries of origin not structured according to the fields of activity, income groups and stay type (long-term, short-term, illegal). Entrepreneurs Net lending/borrowing by type of economic activity (section of NACE) main weaknesses: not information about investments fictive entrepreneurs due to visa Income of foreigners working in the Czech Republic

9. Needful structure of expenses – combination: by groups of countries by stay type (long-term, short-term, illegal) by 12 COICOP classification groups Data sources: Households budget survey (average level And structure of the Czech households) Experts estimates Expenses on final consumption

10. Incomes, expenditures and „savings“of foreigners working in the Czech Republic2006, Monthly in CZK

11. Actual money transfer is influenced by a number of other factors connected with the purpose of stay in our country and the link to the country of origin: may be postponed or there may be no transfer at all may be transmitted regularly, from time to time or at the end of staying in the host country actual transfers are estimated by expected behaviour as a percentage of “savings”, e.g. Slovak - 10 % managers from the western countries - 90% Estimates of remittances „savings“ (250 - 600 EUR per month) = potential remittances

12. Calculation of remittances from the Czech Republic, 2006, mil. CZK

13. Main weaknesses: number of illegal foreign workers - expatriated percentage of “savings” - relationship to the country of origin Questions: Is there better approach how to estimate number of illegal foreign workers? Are there applied any other criterions for definition of residency/ non-residency than one year permanent stay in the host country? Questions and issues