Labor Mobility and Remittances in Asia and the Pacific during and after the COVID-19 Pandemic

Abstract

Labor Mobility and Remittances in Asia and the Pacific during and after the COVID-19 Pandemic LABOR MOBILITY DURING THE PANDEMIC: MASS RETURN AND SLOW DEPLOYMENTThe coronavirus disease (COVID-19) pandemic has affected cross-border movement of workers on at least two major fronts. First, to limit the contagion, many countries have resorted to lockdowns, strict border closures, and travel restrictions and bans, which brought cross-border labor mobility to a halt. Second, the contraction of economic activity at the height of the pandemic led to job cuts and reduced working hours in many destination economies, producing large-scale return migration while also curtailing the new deployment of migrant workers. This ADB brief is an update to the two ADB publications released since the onset of the COVID-19 crisis, 1 reporting on the impact of the pandemic on labor mobility and remittances in the region. 2 This brief discusses key trends observed during the earlier part of 2021 and presents estimated global and regional remittance inflows for 2021 and 2022 based on the computable general equilibrium (CGE) model. With many economies showing signs of more 1The authors would like to thank Paul Vandenberg and Pinsuda Alexander for their comments to the draft. 2 Takenaka et al. ( 2020) discussed the impact of the COVID-19 pandemic on international migration, remittances, and the recipient households in developing Asia along with the estimated remittance inflows to the region for 2020. Meanwhile, Takenaka, Kim, and Gaspar (2021) discussed the factors that have kept remittance inflows in many developing Asian economies afloat in 2020 despite the severity of conditions and the economic downturn during the pandemic.

COVID-19 and the Deployment of Labor Migrants from Asia

“…For example, in 2020, almost 400,000 overseas Filipinos and 4 million Indian nationals were repatriated with assistance from their governments. Large influxes of returning migrants were also recorded in Cambodia, Indonesia, the Lao People's Democratic Republic (Lao PDR), Pakistan, and Sri Lanka (Kikkawa et al 2021).…”

“…Remittance inflows to the region, however, showed strong resilience during the latter half of 2020 following a sudden yet momentary drop in the second quarter of that year (Kikkawa et al 2021). Beginning 2022, deployment of migrants in Asia has picked up its pace and is expected to recover to pre-pandemic levels.…”

Labor Migration in Asia

“…Due to COVID-19, remittance inflows dropped by 2% to $314 billion in 2020 from $321 million in 2019. Most remittance flows during the pandemic were due to migrants' willingness to support their families back home to survive the economic turmoil of the pandemic (Kikkawa et al 2021). Remittances thus played an important role to alleviate economic impacts of the crisis, beyond the instant fiscal subsidies provided by governments.…”

“…Bangladesh, on the other hand, is expected to show a considerable growth of inward remittances at 26% in 2021. The growth of remittance inflows to South Asia was facilitated by government measures in countries such as Bangladesh and Sri Lanka to support migrant workers to send larger remittances back home during the pandemic (Kikkawa et al 2021).…”

“…This covers remittance data from Indonesia, Malaysia, and Thailand; however, data from Singapore are not available. (Kikkawa et al 2021).…”