- Milan Cuc, Erik Lundback, and Edgardo Ruggiero
- Published Date:
- January 2006
©2005 International Monetary Fund
Production: IMF Multimedia Services Division
Cover Design: Martine Rossignol-Winner
Page Design: Alicia Etchebarne-Bourdin
Cover Photo: Valerii Corcimari
Migration and remittances in Moldova / Milan Cuc, Erik Lundbäck, and Edgardo Ruggiero—[Washington, D.C.: International Monetary Fund, 2005].
Includes bibliographical references.
1. Migrant remittances—Moldova. 2. Moldova—Economic policy. 3. Moldova—Economic conditions. 4. Moldova—Economic conditions—Statistics. I. Lundbäck, Erik. II. Ruggiero, Edgardo.
Disclaimer: The views expressed in this work are those of the authors and do not necessarily represent those of the IMF or IMF policy. The IMF has not edited this publication. Some documents cited in this work may not be available publicly.
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- 1. Overview
- 2. Literature on Remittances
- 3. Migration and Remittances in Moldova—A Microperspective
- 4. Macroeconomic Consequences
- 5. Policy Implications
- 6. Conclusions
- Text Tables
- Appendix Table
- 1. Gross Workers’ Remittances, 1996–2004
- 2. Number of People Working Abroad, 1999–2004
- 3a. Population Density, 2001
- 3b. Share of Urban Population, 2002
- 4. Real GDP and Poverty Rate, 1996–2002
- 5. Migrant Contingent: Distribution by Gender and Age
- 6. Migrant Contingent: Country Distribution by Gender
- 7. Education Level of Migrants and Working Population
- 8. Education Level of Migrants by Category of Migrants
- 9. Geographical Distribution of Permanent, Nonpermanent, and Seasonal Migrants
- 10. Year of First Departure, 1983–2004
- 11. Main Migration Directions
- 12. Earnings Received by Moldovan Migrants
- 13. Percent of Earnings Sent to the Family
- 14a. Use of Remittances by Year of Remittance Cycle
- 14b. Use of Remittances by Category
- 15a. Use of Remittances by Year: Breakdown by Type of Savings 30 15b. Use of Remittances by Year: Breakdown by Type of Business Investment
- 16. Workers’ Remittances Through the Banking System, 1996–2003
- 17. Gross Workers’ Remittances as a Share of GDP in 2003
- 18. Distribution of Temporary and Long-Term Workers’ Remittances, 2000–03
- 19. Workers’ Remittances to Moldova by Region of Origin
- 20. Contribution of Consumption and Fixed Capital Formation to Real GDP Growth, 1999–2003
- 21. Remittances’ Growth and Real Consumption Growth, 1997–2003
- 22. GDP, GNI, and GNDI Per Capita, 1999–2003
- 23. Fixed Capital Formation, 1999–2003
- 24. Labor Migration, 1999–2003
- 25. Labor Market Indicators, 1998–2003
- 26. Workers’ Remittances and Foreign Direct Investment, 2000–03
- 27. Moldovan Leu Exchange Rate, 1999–2004
- 28. Assessing Competitiveness, 1996–2004
- 29. Import Coverage, 1996–2004
- 30. Change in Equilibrium REER
- 31. Change in REER and Equilibrium REER
- 32. Money Growth and Inflation, 2003–04
- 33. Unemployment, Unemployment Benefits, and Dependency Ratio, 1998–2004
- 34. Tax Revenue Composition, 1999–2004
- 35. Cumulative FDI Per Capita, 1991–2004
- 36. Business Environment
Labor migration and remittances have increasingly become a part of the global landscape, with profound economic and social consequences. By directly affecting growth performance, public finance, balance of payments, and exchange rate and monetary conditions, they are posing fresh challenges to policymakers. Moldova, a small, low-income country where an estimated third of the economically active population has been working abroad, is an interesting illustration of this trend.
This Special Issues paper examines the microeconomic characteristics, macroeconomic consequences, and policy challenges of labor emigration and remittances in Moldova. Drawing on household survey data, it attempts to explain why Moldovan workers go abroad and how their remittances are used. With this background, the paper provides insights into policy challenges of coping with, and maximizing benefits from, international labor mobility and the large inflows of remittances. Appropriate macroeconomic policies are important, but a more determined and sustained effort to improve the business environment is needed to enhance Moldova’s attractiveness to foreign capital and stimulate more foreign investment inflows. It would also facilitate the allocation into productive use of larger portions of migrants’ remittances, which today are predominantly used to finance household consumption and residential construction. The signing of the EU-Moldova Action Plan in early 2005 offers hope for reinvigoration of the structural reform agenda.
The authors would like to thank Marta Castello-Branco, Thomas Richardson, Anita Angelovska Bezoska, Lawrence Bouton, Vladimir Munteanu, and Tom Walter for their helpful comments. A special thanks goes to Octavian Scerbatchi and Slava Buickly for their untiring and excellent research assistance; Tracey Lookadoo for her impeccable editorial assistance; Shirley Davies of the External Relations Department for her assistance with typesetting; and a number of others who helped the authors bring this paper to fruition, including Katsiaryna Svirydzenka and Ian Bulmer. Archana Kumar of the External Relations Department coordinated the production of this publication.
The authors would like to thank the Moldovan authorities for their cooperation.
The views expressed here are those of the authors and do not necessarily reflect those of the IMF, its Executive Directors, or the Moldovan authorities.