Remmitances of Ukrainian Labor Migrants: Factors, Channels, Use

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Remmitances of Ukrainian Labor Migrants: Factors, Channels, Use

Journal Title: Демографія та соціальна економіка - Year 2013, Vol 19, Issue

Abstract

Remittances are a factor of a significant importance for the Ukrainian economy. However, the investment use of remittances remains a serious problem for Ukraine; its solution is inhibited by improper state of scientific research in the field of migration. Based on the research of Ukrainian labor migrants working in a number of EU countries (Czech Republic, Poland, Portugal, Spain, Italy, Greece, France), the article examines the factors that determine the amount of remittances sent by migrant workers to Ukraine, channels of money transfers, the structure of remittance expenditure. The main factor which determines the amount of transferred money is wages of Ukrainians abroad. Migrants’ earnings, on average, are equal 727.9 euro per month. However, migrants’ wages vary depending on host countries and the nature of performed work. The highest wages – nearly a thousand euros per month – are earned by builders, and industrial workers earn almost as much. Wages in agriculture are small. In different host countries wages are not the same. High wages (around one thousand euros), according to the answers of the respondents, are in France, the lowest wages are in Poland (460 euros). A certain part of the money earned abroad is spent on consumption by migrants in the host countries. According to the data obtained during the survey, it is an average 55%. However, the range of answers to this question is wide: from 20 to 100%. Today, most of migrant workers – 76.3% – transfer money to Ukraine. Men make remittances more often than women (77.6% and 69.7% respectively). Using the information about the frequency of transfers (about 7 transfers per year for each migrant), it can be assumed that on average, one migrant sends home 3.3 thousand euros annually. Ukrainian migrants in the EU most often use international payment systems for remittances. Informal channels of money transfers – through friends, acquaintances, and other couriers – are second in popularity followed by personal transfer of money during visits home. Migrants’ parents were the most often beneficiaries of remittances, 66.3% of respondents sending money home forwarded money to them. 26.6% provide financial support for their children, 19.9% – for sisters and brothers. 15.4% of migrants send money to their spouses. The low standard of living of the population of Ukraine leads to the fact that remittances sent by migrant workers from abroad are often spent on daily consumption (food, clothes, public utilities payment). It is alarming that a large group of Ukrainian migrants prefer to spend their money earned abroad in countries of employment. For example, one third of respondents who buy real estate do so abroad, and nearly half of potential entrepreneurs do not associate their plans to open a business with Ukraine, the majority of savings are also accumulated abroad. Thus, the amount of cash inflows in Ukraine from migrant workers in EU is significant; however the biggest part of money earned by them remains in the host countries. It is possible, that the extension of the migrants’ stay duration and family reunification abroad will tend to reduce the amount of remittances in the future. Because of migrants’ distrust of the Ukrainian financial institutions and of the government as the guarantor of citizens’ property rights, part of migrants are already saving money, buying real estate not at home but in the host countries, even despite of the serious crisis in foreign economies.

Authors and Affiliations

I. P Maidanik, O. A. Malynovska

Keywords

EP ID EP287261
DOI 10.15407/dse2013.01.120
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