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News Article

Migration, Remittances Affected by COVID-19: BBVA

By Sofía Hanna | Wed, 07/14/2021 - 18:41

The COVID-19 pandemic affected migration across the globe, hurting, in turn, several labor markets, reports BBVA Research’s “Yearbook of Migration and Remittances Mexico 2021.” The report, which came out on July 14, also points that the smaller number of migrants could have an impact on Mexico’s remittances.

 

Globally, the migrant population in 2020 reached 280.6 million people but the COVID-19 pandemic affected migration trends. The pandemic led several countries to sharply reduce the number of issued visas. For example, the US issued 96.8 percent less visas in 2020 over the previous year, while the UK issued 43.1 percent less. This drop-in migration affects these economies because the migrant labor force has a strong participation in essential sectors. In the US, for example, migrant labor represented over 16 percent of the health sector’s workforce, 19.8 percent of the workforce in the agricultural sector and 11.7 percent of the food manufacturing sector, reports BBVA Research.

The US has a significant population of Mexican migrants, reports BBVA Research: “between 2007 and 2020, the population Mexican migrant in the US has remained relatively stable at around 12 million inhabitants and in 2020 there were a total of 38.8 million people of Mexican origin residing in the US, representing 12 percent of the total population in the US.” Between 2015 and 2020, most Mexican migrants to the US came from Guanajuato (62,476), Jalisco (60,587) and Michoacan (50,770). One in three of those migrants does not have medical coverage.

Migration is directly linked to remittances. In April 2020, the World Bank estimated that global remittances would fall 19.9 percent in 2020 but estimates made in May 2021 point out that the contraction was significantly smaller: only 2.4 percent. However, Mexico has become increasingly dependent on remittances, adds BBVA Research. In 2020, the bank estimated that the dependency amounted to 3.8 percent when on average it had remained at 2.3 percent between 2003 and 2019. The states most dependent on remittances are: Michoacan, Guerrero, Oaxaca, Zacatecas and Nayarit.

However, remittances grew by 11.4 percent in 2020 and they are forecasted to increase by 21.7 percent in 2021, which would be the equivalent of US$49.4 billion. Mexico is now the third country in the reception of remittances globally, surpassed only by India and China.

The data used in this article was sourced from:  
BBVA
Sofía Hanna Sofía Hanna Junior Journalist and Industry Analyst