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

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 division according to the main groups of countries

5. Four stages of statistical estimate of remittances  E stimate 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. Number of foreigners working in the Czech Republic 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

7. Numbers of foreigners working in the Czech Republic, 2006 Non-residents employees Residents Economic ally non- active foreigners Total legalillegal employe es entrepr eneurs European monetary union841:9 5985 2803 25118 970 of which: managers697:7 007x2 0649 768 European Union - non-members of EMU12 867:88 04110 77623 715135 399 of which: Poland1 263:12 9391 3851 80417 391 Slovakia11 065:73 0608 51220 925113 562 Third countries55 527:35 95079 83335 684206 994 of which: Western countries 2 021:1 9241 3521 7597 056 Ukraine35 318:22 35629 4298 41395 516 Russia4 805:3 4575 0044 87418 140 Vietnam231:22327 57010 93538 959 Non-legal personx7 117xxx Total69 2357 117133 58995 88962 650368 480

8. Income of foreigners working in the Czech Republic 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

9. Expenses on final consumption 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

10. Incomes, expenditures and „savings“ of foreigners working in the Czech Republic 2006, Monthly in CZK European monetary union EU - non-members of EMU Third countries Total manager s TotalSlovakiaTotalUkraine Number of persons 10 4397 704100 90884 12598 59457 674 209 941 Wages and salaries, gross 43 66359 60332 00922 95824 64518 958 28 443 (-) Employees´ social contributions -3 506-5 458-7 450-4 001-2 870-3 080 -2 370 (-) Taxes on income -4 250-8 012-12 358-5 032-2 623-3 107 -1 887 Wages and salaries, net 35 90746 13312 20113 92419 15212 770 24 187 Individual consum- ption expenditure 16 88417 2067 182 7 471 4 666 4 2206 482 of wehich:1.Food, non- alcoholic bev. 3 6594 2971 792 1 837 1 286 1 2611 647 2.Alcoholic beverages, tobacco 1 9112 218860 880 618 600799 3.Clothing and footwear 1 4581 797348 339 252 241358 4.Housing, water, electricity, gas,.. 4 3692 9611 987 2 220 879 5701 585 5.Furnishings, household equip.,... 524597182 107 103163 6.Health 16618379 83 48 4569 7.Transport 510305614 640 394 375506 8.Communication 13519122 138 64 4796 9.Recreation and culture 2 0272 359192 173 88 49234 10.Education 27036 18 1627 11.Restaurants and hotels 258264587 564 727 748637 12.Miscellaneous goods, services 1 8402 206383 380 185 165362 "Savings" per month 19 02328 9275 0196 45314 4868 550 17 705

11. Estimates of remittances 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 „savings“ (250 - 600 EUR per month) = potential remittances actual transfers are estimated by expected behaviour as a percentage of “savings”, e.g. Slovak - 10 % managers from the western countries - 90%

12. Calculation of remittances from the Czech Republic, 2006, mil. CZK Non-residents employees Residents non-active foreig ners Total legalillegalemployees entrepren eurs Number of persons69 2357 117133 58995 88962 650368 480 D.11 Wages and salaries16 2391 11040 644xxx D.12 Employers´ social contributions5 521x13 821xxx D1 Compensation of employees21 7601 11054 465xxx (-)D.51 Taxes on income-1 721x-5 220xxx (-)D.6111 Employers´ actual social contributions-5 521x-13 821xxx (-)D.6112 Employees´ actual social contributions-1 949x-4 877xxx (-)D.611 Actual social contributions-7 470x-18 698xxx (-)P31 Individual consumption expenditure-3 949-343-12 040-15 619-2 155x B.9 Net lending(+)/net borrowing(-)xx 75 558xx "Savings" usable for remittances8 62076718 50759 939-2 15585 678 Remittances, total8 62076716 93826 325 Remittances, % of "savings100% 22%31% Monthly remittances per person (in EUR)39934595229

13. Questions and issues 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?