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Many research and policy questions surrounding migration are causal questions. What causes people to migrate What are the consequences of migration for the migrants, their families, and their communities Answering these questions requires dealing with the self-selection inherent in migration choices. Field and natural experiments offer methodological approaches that enable answering these causal questions. This paper discusses the key conceptual and logistical issues that face applied researchers when applying these methods to the study of migration, as well as providing guidance for practitioners and policymakers in assessing the credibility of causal claims. For randomized experiments, this includes providing a framework for thinking through what can be randomized; discussing key measurement and design issues that arise from issues such as migration being a rare event, and in measuring welfare changes when people change locations; as well as discussing ethical issues that can arise. The paper then outlines what makes for a good natural experiment in the context of migration, and discusses the implications of recent econometric work for the use of difference-indifferences, instrumental variables (and especially shift-share instruments), and regression discontinuity methods in migration research. A key lesson from this recent work is that it is not meaningful to talk about “the” impact of migration, but rather impacts are likely to be heterogeneous, affecting both the validity and interpretation of causal estimates.

The district of Cox’s Bazar, in southeastern Bangladesh, is an instructive context to understand how long-standing and newer growth opportunities and constraints manifest at the local level, remote from Bangladesh’s major growth poles of Dhaka and Chittagong. Potentially exacerbating Cox’s Bazar’s pre-existing development challenges, the district is hosting a large influx of displaced Myanmar nationals (Rohingya). More than 884,000 people have crossed into Bangladesh from Myanmar, the vast majority since August 2017, more than doubling the population living in the Cox’s Bazar upazilas of Teknaf and Ukhia, which had higher poverty rates than the rest of the district prior to the arrival of Rohingya.

The aim of this report is to provide a broad overview of the current state of gender equality in Tajikistan. While the Europe and Central Asia (ECA) region traditionally surpassed many other regions in terms of gender equality, this advantage has been eroding in recent decades. Particularly in Tajikistan, concerns have been raised that men and women have unequally born the consequences of economic, political, and social transitions after independence in 1991. The report examines several dimensions of gender equality both quantitatively and qualitatively. Tajikistan has set up a legal framework that enshrines principles of equality and non-discrimination, but better implementation results require continued efforts. Prevailing social norms and patriarchal systems of decision-making limit women s ability to make effective choices be it at home or at work. The paper is structured along the following lines. The first section introduces the idea of agency that will remain an important issue throughout the report. This is followed by an analysis of disparities in human capital endowment, including health and education. Gender gaps in the Tajik labor market and entrepreneurial activities of men and women are discussed in the fourth and fifth section. The final section concludes with some policy recommendations that might be beneficial for discussions among policy-makers, civil society actors, and development partners.

Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies. The results suggest that remittances and aid flows are associated with increased international risk sharing. Other types of capital flows are not consistently correlated with better risk-sharing outcomes. These findings are robust to the use of different econometric specifications, country-specific characteristics, and other controls.

Central America comprises a diverse set of countries, including two high-middle-income countries (Costa Rica and Panama), two of the poorest countries in Latin America and the Caribbean (Honduras and Nicaragua), and two middle-income economies (Guatemala and El Salvador). Low productivity and weak institutions are behind the modest economic growth in Central America in recent years. Both the common features and striking differences among Central American countries provide a fertile ground for exploiting complementarities. Common features include: (i) strong economic links to the United States; (ii) high labor mobility across countries and a high level of informality; (iii) the relatively poor quality of infrastructure, including border crossings; (iv) a concentration of poverty in rural areas, with a low provision of public services, that affect particularly vulnerable groups such as indigenous and Afro-descendent populations; and (v) a high exposure to natural disasters and economic and financial volatility. The economies of each of the six countries in the sub-region were heavily affected by Coronavirus disease 2019 (COVID-19). In order to restore economic activity in the short run and increase potential output over the long run, Central America should launch coordinated policy action in five areas: (i) global value chain (GVCs); (ii) trade integration; (iii) formalization; (iv) management of volatility; and (v) remittances (for the northern Central American countries). The findings and recommendations emerging from the analyses are presented in the report.

Migration has been demonstrated by various studies to be closely linked to improvements in individual- and household-level outcomes. Rather than examining the effects of migration, this paper explores whether an economic shock in United States negatively affected migrant households in rural Guatemala. Treating the Great Recession as a natural experiment affecting migrant and non-migrant households differently, the paper puts the spotlight on the effect on child anthropometry, including longer-term indicators of height-for-age z-scores. Panel data on children and multiple children in households enable double- and triple-difference estimation. In relative terms, migrant households fared far worse than non-migrant households over the period. In particular, large advantages in child anthropometric status for the youngest children in migrant households in 2008, just prior to the crisis, were substantially diminished four years later. The findings underscore the possible fragility of the benefits of migration, particularly in the face of a substantial economic shock, and point to the potential importance of deepening social safety nets.

Twelve of the 29 transition economies in Europe and Central Asia are high remittance recipients, with average remittance receipts equivalent to 5 percent or more of their gross domestic product in the 2010s. The paper examines the evolution, during the 2000s and 2010s, of real unit labor costs, denominated in local currency and U.S. dollars, of the transition economies. Local currency and U.S. dollar real unit labor costs rose much faster between 2003 and 2015-17 in the high remittance recipient economies than in the other transition economies, although there was considerable variance between the countries in the high remittance recipient group. Among the high remittance recipients, approximately half of the increase in real unit labor costs denominated in U.S. dollars can be attributed to increases in local currency real unit labor costs and half to appreciation of their real exchange rates. Fixed effects and cross-country econometric estimates suggest that remittances had a positive and significant impact on the changes in domestic currency real unit labor costs in the transition economies.

The Solomon Islands is a lower middle income small island state in the Melanesian region of the Southwest Pacific. Agriculture, including logging, is central to the economy of the Solomon Islands. To protect the country from importation of Coronavirus (COVID-19) and to limit the possible spread of undiagnosed cases, beginning March 27, the government enacted a series of emergency measures under the State of Public Emergency (SoPE). Coronavirus (COVID-19) response measures, both domestically and abroad, are expected to have negative impacts on the economy and on livelihoods. A strong evidence base is needed to understand the socioeconomic implications of the coronavirus pandemic for the Solomon Islands. The objective of this survey was to measure the socioeconomic impacts of the Coronavirus (COVID-19) global pandemic in the Solomon Islands, including livelihoods, food security, and public safety and security, through a high frequency mobile phone survey.

As of March 30, 2020, Ethiopia was hosting 758,199 registered refugees and asylum seekers, making it the second largest refugee-hosting country in Africa. Ethiopia is in the process of making far-reaching changes to its refugee policies. In 2016, it made nine pledges at the Leaders’ Summit on Refugees held in New York aimed at helping refugees gain greater mobility; improving access to services, especially education; expanding access to livelihoods, jobs, and irrigable land; and facilitating the local integration of long-term refugees. In February 2019, the Ethiopian parliament adopted a new refugee proclamation to facilitate the implementation of its pledges. Secondary legislation that will give effect to the proclamation is under preparation. This report, commissioned during this changing policy context, examines the social impacts of protracted displacement on the lives of refugees and host communities.

This report represents the main findings from the first round of village-level community assessment of the economic and social impacts monitoring of COVID-19 in Myanmar. A total of 224 individuals (four per village, selected for their knowledge of the situation of the village, and representativity of key sub-groups), were interviewed across 56 villages, in two townships in every state and region across the country. All interviews were conducted by phone in July 2020 and lasted approximately one hour each. The below findings are a snapshot of the situation as of July 2020, prior to the surge in case numbers in late August, at a time when many travel restrictions were lifted, and the official number of COVID-19 cases was around 350. Myanmar reported the country’s first cases of COVID-19 in late March 2020, followed shortly thereafter by confirmation of community transmission. In the following months, though testing was initially extremely limited, the Ministry of Health and Sports responded with robust contact tracing and implemented strict quarantine protocols for travelers entering Myanmar from abroad (primarily Myanmar citizens returning home), and for domestic and international cross-border migrants returning to their villages. Restrictions on domestic and international travel, as well as curfews and closures of businesses and schools, were implemented across the country before they were relaxed in June and July 2020. In April 2020, the Union government issued the COVID-19 Emergency Response Plan, which included steps taken by the government to control transmission and mitigate the economic and social impacts of both the virus and measures implemented to control its spread. Assistance from the Union government included provision of foodstuffs to poorer households, a moratorium on debt collection, a one-time cash payment to households in need, and a top-up in existing cash transfer programs targeting pregnant women, nursing mothers, and the elderly. Respondents indicated that fear of contamination was by far the main concern of villagers. However, evidence suggests that adherence to social distancing measures and government regulations waned over time. Compliance with government instructions was higher during the early stages of the pandemic response following the discovery of the virus in Myanmar. The community-level assessment investigates the impacts of COVID-19 in six focus areas: (i) health and behavior; (ii) livelihoods and migration; (iii) coping mechanisms; (iv) social relations; (v) leadership; and (vi) aid. In addition, the research was designed around several factors (markers), that may contribute to either deepening or mitigating the impacts of the pandemic.

Malaysia has been grappling with understanding how many foreign workers reside in the country and thus faces challenges in formulating evidence-based foreign worker policies. This paper uses micro-level remittance transaction data collected from money transfer service providers to estimate the number of foreign workers. Most foreign workers remit a large portion of their earnings to support family members back home. They are low-income earners, sensitive to remittance costs, and opt for money transfer service providers to remit money rather than regular banks, where transfer services are more expensive. Therefore, the remittance data provide a useful source to conduct the investigation. Existing estimates range from two million to five million foreign workers; our results narrow that range to between 2.99 million and 3.16 million foreign workers in Malaysia as of 2017-18. The estimated state and nationality distributions of foreign workers are consistent with the Ministry of Home Affairs data, lending support to the validity of the estimates. Nevertheless, the Bank Negara Malaysia remittance data could potentially underestimate the number of workers in states with low access to money service providers and nationalities that have access to alternative money transfer mechanisms such as commercial banking and informal transfer channels.

This paper attempts to assess the vulnerability of Armenian temporary international labor migrants and their families to the labor market challenges posed by the Coronavirus (COVID-19) outbreak. The authors estimate that about fifty percent of temporary labor migrants might have been unable to leave for Russia owing to travel restrictions. Many Armenian migrants in Russia are likely to lose jobs because of some halts in construction activities. Prospective migrants who were unable to leave Armenia are more likely to be jobless based on the employment status they had prior to departing for Russia. This would result in reducing remittances and exposing remittance-dependent households to precarious situations. Targeted policies to address this new vulnerable group are called for.

Malaysia has been grappling with understanding how many foreign workers reside in the country and thus faces challenges in formulating evidence-based foreign worker policies. This paper investigates how to use micro-level remittance transaction data collected from money transfer service providers to estimate the number of foreign workers. Most foreign workers remit a large portion of their earnings to support family members back home. They are low-income earners, are sensitive to remittance costs, and thus opt for money transfer service providers to remit money rather than regular banks, where transfer services are more expensive. Therefore, the remittance data provide a useful source to conduct the investigation. Existing estimates range from two to five million foreign workers; our results narrow that range considerably, estimating a total of 2.99 million to 3.16 million foreign workers in Malaysia as of 2017–18. State and nationality distributions of foreign workers in our estimates are consistent with the Ministry of Home Affairs data, lending support to the validity of our estimates. Nevertheless, authors note that the Bank Negara Malaysia remittance data could potentially underestimate the number of workers in states with low access to money service providers, as well as nationalities that have access to alternative money transfer mechanisms such as commercial banking and informal transfer channels.

This edition of the Nigeria Development Update provides policy options that Nigerian policymakers may consider in order to mitigate the impacts of COVID-19 (coronavirus) and lay the foundation for a strong recovery. These policy options are organized in the five areas: 1. Containing the COVID-19 outbreak and preparing to deal with a more severe outbreak; 2. Enhancing macroeconomic management to boost investor confidence; 3. Safeguarding and mobilizing revenues; 4. Reprioritizing public spending to protect critical development expenditures; 5. Supporting economic activity and provide relief for poor and vulnerable communities.

The Tunisia Economic Monitor provides an update on key economic developments and policies. It examines these economic developments and policies in a longer-term and global context and assesses their implications for the outlook for the country. There are two special focus sections in this edition of the Tunisia Economic Monitor. The first discusses the macroeconomic impact of the COVID-19 (coronavirus) pandemic on the Tunisian economy and the second presents findings from a diagnostic of Tunisia’s infrastructure sectors (transport, electricity, water and sanitation, and information and communication technology) carried out by the World Bank in collaboration with the Government of Tunisia.

Emerging markets and developing economies (EMDEs) weathered the 2009 global recession relatively well. However, the impact of the global recession varied across economies. EMDEs with stronger pre-crisis fundamentals -- such as large foreign exchange reserves, sound fiscal positions, and low inflation -- suffered milder growth slowdowns, in part due to their greater capacity to engage in monetary and fiscal stimulus. Low-income countries were also resilient, as foreign aid and inflows of remittances remained relatively stable. In contrast, EMDEs that were heavily dependent on short-term capital flows -- such as portfolio investment and cross -- border bank lending—fared less well, especially those in Europe and Central Asia. A key lesson for EMDEs is the need to strengthen macroeconomic frameworks and create policy space to prepare for future global downturns.

This study examines the asset gains to households in Kerala, India, from two types of labor migration: moving overseas versus moving within India for employment. It draws on panel data from waves of a representative household survey conducted in 1998 and 2003. Migrant households as a whole experienced higher asset gains than non-migrant families over this five-year period. Contrary to theoretical expectations, asset gains were similar for households with an overseas migrant and those with a domestic migrant. Although less educated individuals tend to venture overseas, a wage premium over non-migrants enables them to earn as much in low-skill jobs abroad as more educated workers relocating within India can.

The note describes the key challenges facing the health, livelihoods, and mobility of internal and international migrants and their families due to the COVID-19 (Coronavirus) outbreak. The note presents the policy options available to governments to address these challenges and describes the assistance that the World Bank can offer in areas related to social protection and jobs to support these efforts. The living and working conditions of internal and international migrants make them vulnerable to contracting COVID-19 (Coronavirus). Measures put in place to control disease transmission both within and across countries have resulted in significant disruption in transportation networks and in labor markets that have hit migrant workers hard. The resulting decline in remittances will transmit these negative impacts to the families of migrants. Travel restrictions may lead to labor shortages in critical sectors like agriculture that are dominated by migrant workers. While the specific type of support that should be targeted to migrants depends on location, legal status, and type of migration, most migrants will need access to safety nets in the form of cash or in-kind assistance to support them as they comply with transmission control measures and cope with the impacts of the crisis. Policies to support employment retention and promotion will be particularly important as a complement to these safety nets for internal migrants and migrants returning from abroad. Policies to offset the expected declines in remittances will be important for all migrants and their families. Programs created to respond to the COVID-19 (Coronavirus) outbreak should be migrant-sensitive to take into account the unique challenges facing migrants.

International migration for temporary employment is a critical component of South Asia’s development path, from both the jobs and remittance flows perspectives. South Asian economies are at a stage of demographic transition where people of working-age are generally still increasing shares of populations, with millions of people entering the working-age cohort every year for another generation. This report focuses on Bangladesh, Nepal, and Pakistan - three countries in the region sharing similar characteristics, opportunities, and challenges when it comes to international migration. All three are lower-middle income countries where sizeable shares of the working age population migrate overseas. Migration has large positive effects on South Asian economies overall, often noted by the fact that remittances tend to be very high in relative and absolute terms. Several of the policy actions that can be taken in the pre-migration phase of the migration life-cycle to reduce the vulnerability of migrants will directly reduce costs and improve access for poorer households. Reducing volatility and improving sustainability will require sending countries to ultimately diversify the markets where they send their workers.

FinTech has tremendous potential in the Europe & Central Asia (ECA) region, given its high mobile phone and internet access levels and scope for increased use of digital payments. However, there are major regional differences between high-income and middle-income countries regarding access to technology, FinTech adoption, and regulatory capacity. This paper analyzes the opportunities and risks related to FinTech in the ECA region, focusing on these three key financial sector challenges: (i) high costs of international remittances, (ii) inefficiencies in the provision of domestic payments, and (iii) low levels of MSME's access to finance. It also analyzes the level of FinTech development in the region, and delves into the state of FinTech policy, regulation and supervision in the region along with an analysis of reform needs. Finally, this paper touches upon the role for international public policy coordination related to FinTech generally, with a focus on the ECA region.

Lao People’s Democratic Republic (PDR) has made substantial progress in poverty reduction, despite the fact that its resource-based development pattern has historically limited the impact of growth on poverty reduction. Although poverty declined, mirroring economic growth, the impact of growth on poverty reduction was low. As a result, the country lacks productive industries to absorb labor and create high-quality jobs. The Lao Statistics Bureau (LSB) has conducted the LECS at five-year intervals since 1992-1993.The LECS survey is the primary source of official poverty statistics in Lao PDR, providing critical information for monitoring progress on poverty reduction, identifying poor and vulnerable groups, and ultimately informing government policies aimed at poverty eradication. This poverty assessment will provide insights into the success (or lack thereof) of poverty reduction in Lao PDR during the past six years. The report will also help identify poor and vulnerable populations as well as emerging issues that have slowed progress toward inclusive development. The report is divided into two parts. Section 1 provides updates on poverty and inequality in Lao PDR. Section 2 approaches key drivers of poverty and escape routes from poverty by topic.

In 2018, Indonesia’s poverty rate fell below 10 percent for the first time; poverty rates had halved over the previous two decades, driven in large part by strong economic growth in the country. Continued economic growth, rather than changes in distribution, will continue to be a key driver of poverty reduction. The objective of continued economic growth and poverty reduction is apparent in the Government of Indonesia’s new medium-term development plan (Rencana Pembanguanan Jangka Menengah Nasional or RPJMN) (2020-2024). Investments in gender equality to close specific gender gaps have the potential to contribute to greater economic growth for Indonesia, thereby contributing to further poverty reduction. The objectives of this report are to review the current status of gender equality and women’s issues in Indonesia; and to provide an evidence base for the Indonesian Government on specific actions and priority responses needed to close gender gaps to drive the growth and human capital potential of the country. Specifically, the assessment focuses on areas where demonstrated improvements in gender equality can contribute to economic growth, both in the short term through improvements in economic participation, but also over the medium term through investments in human capital. The report starts by providing the assessment framework and context to understand patterns of gender equality in Indonesia in chapter one and chapter two. It then moves to a discussion on women’s economic participation to elucidate the key factors underlying these current trends in chapter three, before moving to a discussion of the current areas Indonesia will need to address to ensure the equivalent human capital accumulation of women across the country in chapter four. It then summarizes some of the early dual health and economic impacts of the novel coronavirus (COVID-19) pandemic in chapter five, before providing a set of strategic priority actions to advance the country’s growth and poverty reduction objectives through investments in gender equality in chapter six.

The government of Myanmar is committed to creating new and better jobs, including for migrant workers. In 2018, they introduced the Myanmar sustainable development plan (2018-2030), a national strategy to inform policies and institutions that drive inclusive and transformational economic growth. Goal 3 of that plan focuses on job creation and private sector-led growth, and it includes separate strategies for job creation in rural areas, in industry and services, and in small and medium enterprises (SMEs); another part of goal 3 addresses the need to improve the enabling environment for investment. Protecting the rights and harnessing the benefits of work, including for migrant workers, is likewise addressed in the government’s plan. The ministry of labor, immigration, and population also released two national plans of action that highlight the importance of migration for Myanmar and the need to improve its management.

In this note authors explore the many ways that adults in the Maldives are using digital payment services through mobile phones, the internet, and bank accounts. The authors also explore savings habits and outline opportunities to use digital technology to bring financial services to adults who still have no accounts. The Findex Notes series summarizes data compiled by the Global Findex from nationally representative surveys of more than 150,000 adults in over 140 economies in 2017, including more than 1,000 adults in the Maldives. Research is showing that when people embrace digital financial services, a range of development benefits follow. When women in India received personal accounts linked to a jobs guarantee program, they increased their labor force participation and earnings compared to women who received such payments into a join account controlled by their husbands. The improvements in employment and earnings improvements disproportionately benefitted women with previously low labor force participation and those whose husbands were most opposed to their getting a job. Women-headed households in Nepal spent 15 percent more on nutritious foods (meat and fish) and 20 percent more on education after receiving free savings accounts. Another study found that the adoption of mobile money accounts in Kenya helped lift 194,000 people out of poverty, and that the accounts proved especially beneficial for women. Mobile money has also been cited as a fast and efficient method of sending and receiving funds from a network of acquaintances during an emergency, potentially reducing the likelihood that those impacted by a financial crisis will descend into poverty.

This report analyzes issues related to international migration in Armenia and its impact on Armenian households’ welfare. The report uses microdata coming from two recent household surveys, the 2017 Russian-Armenian University survey, a nationally-representative household focused on international migrants and their origin households, and the 2017 Integrated Living Conditions Survey, nationally representative household conducted by the Statistical Committee focused on welfare measurement but also with information on international migrants. The report finds that among international migrants, there are some slight differences in the profile of permanent and temporary migrants. Permanent migrants tend to be younger, more educated and are more likely to come from secondary cities, in contrast to temporary migrants, who are a bit older, less educated and are more likely to come from rural areas. Employment prospects for both groups are very limited the moment they leave the country, with employment rates around 25 percent. They tend to migrate largely to the Russian Federation, where they are hired almost exclusively by firms in the private sector. Temporary workers overwhelming work in the construction sector, while permanent workers show more diversity in sectors of employment.

The objectives of this study are to understand the determinants of reservation wages and measure the gap between reservation and market wages in North Macedonia. The study makes use of recently collected information on reservation wages in the Labor Force Survey 2016 and 2017. The analysis relies on ordinary least squares, propensity score matching, Heckman-corrected estimates, and panel fixed effects. The results suggest that it is mainly supply factors that shape reservation wages in the country. Higher education achievement sizably increases future wage expectations, while age and longer spells of unemployment reduce them. Demand factors are found to be insignificant for reservation wage formation. Observed by skill level, the results suggest that low-skilled individuals consistently value their skills higher than what the market offers and set too high expectations. These circumstances are aggravated in cases where the household is well-off and/or receives remittances. By contrast, highly skilled individuals, despite maintaining a positive reservation wage gap, have a propensity to accept market wages even when they fall below their reservation wage, likely because these workers fear rapid depreciation of their skills.

This paper analyzes the differential impact of migration on labor supply of the left-behind household members in Nepal, where international migration for employment, predominantly a male phenomenon, increased substantially between 2001 and 2011. Using the Nepal Living Standard Survey data, the paper extends the analysis by incorporating the impacts on the extensive and intensive margins. The study also answer the question: if they are not wage-employed, in what activities are the remaining household members engaging instead? The paper finds that, in response to out-migration of some family members, women realign their priorities and reallocate their time from market employment to self-employment and home production, possibly filling in the roles vacated by the migrants. In contrast, the income effect dominates the impact of migration on the left-behind men; that is, men value their leisure more because of the remittances from abroad and decrease their overall supply of labor. Additionally, the research finds significant heterogeneity in the supply of labor by age, skill, and household head status among the left-behind women, pointing toward intrahousehold bargaining.

This paper outlines the structure and economic foundation of the World Bank's macroeconomic and fiscal model (MFMod). MFMod consists of individual country models for 181 countries. The models are used by country economists within the World Bank's Macroeconomics, Trade and Investment Global Practice to (i) generate country forecasts and (ii) simulate various policies. Each model has a similar structure and functional form, with variation reflecting data availability and economic specialization (notably for oil exporters). Although the functional forms are similar, the parameters are country specific and estimated at the country level. Forecasts across countries are live-linked, with the export market growth of each country calculated as a trade-weighted average of imports of each of its trading partners. Remittance inflows and outflows are balanced across countries through a similar mechanism. Other cross-country linkages come through the real effective exchange rate and export and import prices, which are a function of world commodity prices and local cost considerations.

Gross domestic product (GDP) growth in Nepal is estimated at 7.1 percent in FY2019, driven mainly by the service and agriculture sectors. The service sector is likely to grow by 7.5 percent due to a boost in the retail, hotel, and restaurant subsectors, driven by an uptick in tourist arrivals and remittance-fueled private consumption. Agriculture is estimated to grow by 5 percent in FY2019, well above its 30-year average of 3.1 percent, due to good monsoons, increased commercialization, availability of fertilizers and seeds, and improved irrigation facilities. Industrial growth is also likely to be strong at 8.1 percent, well above its 30-year average of 5 percent, mainly due to improved power availability from increased electricity generation. Private investment and consumption are likely to be the main contributors to growth on the demand side. However, public investment is projected to contract due to a slowdown in post-earthquake reconstruction and delays in national pride projects like Melamchi water supply and Upper Tamakoshi hydroelectric.

Mobile money lowers the costs of financial transactions, making it a promising tool for brining financial services to rural areas. This paper studies the effects of rolling out mobile money agents in poor and remote areas in Northern Uganda. The authors randomly assigned 329 areas to receive an agent in 2017, using 329 areas as a control group. Data from a 2018 household survey and administrative transactions data show little effect of the rollout. Mobile money transactions remained low, suggesting policies focused only on opening mobile money agents will not lead to transformative effects in poor and remote areas.

Armenia has experienced massive outflows of its people over years. Emigrants’ share of the Armenian population stood at approximately thirty-two percent in 2017, according to migration data from the United Nations (UN). Half of Armenian emigrants reside in Russia. Other key destinations include Azerbaijan, the United States and Ukraine. Recent migration is primarily temporary labor migration, unlike the permanent emigration that occurred in the 1990s. Remittances resulting from migration constitute important support to the welfare of households and the domestic economy. Nevertheless, the effects of remittances and migration on labor markets are not fully understood. As migration is likely to continue, such questions are still timely and relevant. The Russian-Armenian University (RAU) survey data indicate that about as many people would like to migrate as are current first-time migrants. This policy brief aims to explore and address the two questions about migration and its effects on the labor market in Armenia. It uses data from the household migration surveys conducted by the RAU over the three-year period of 2015-2017. The brief describes the general landscape of temporary labor migration and presents relevant policy recommendations.

Sudan is at a critical juncture regarding the direction of its economy and its development path. The loss of a large share of oil revenues in the wake of the secession of South Sudan has given rise to a period of growing macroeconomic imbalances and moderately low rates of economic growth. Despite periodic adjustment measures, inadequate policies, including deficit monetization, have exacerbated macroeconomic imbalances. This report on poverty and shared prosperity in Sudan, covering 2009 to 2014 is structured as follows: Chapter II provides background information on sociodemographic characteristics of Sudan’s population, Sudan’s political developments, as well as recent macroeconomic trends; Chapter III provides a profile of monetary poverty and inequality with a focus on trends and drives over 2009–2014; Chapter IV provides a non-monetary poverty profile that covers demographics, education, access to productive assets, ownership of durable consumption goods, housing conditions and rent, and access to services; To rationalize the observed trends in poverty and inequality, Chapter V explores trends in labor markets, including labor productivity, labor market participation, employment, wages, and returns to education; Chapter VI provides an analysis of shocks, coping strategies, and transfers, including international remittances; and the final chapter summarizes and provides policy implications.

As one of the most pivotal ways that labor markets adjust to changing economic conditions, international migration is never far from the center of the national discussion in Uzbekistan. This paper summarizes the relationship between recent international migration trends and household well-being using a combination of administrative records and unique panel survey data from the Listening to the Citizens of Uzbekistan study. The panel design provides data on changes in well-being leading up to and following a migrants' departure. This feature enables analysis that controls for unobserved time-invariant respondent and location characteristics. The findings show that weak local labor markets drive labor migration from Uzbekistan. Beginning to consider migration is associated with low life satisfaction, job loss, and unemployment. In contrast, actually migrating is associated with a remarkable improvement in labor market outcomes, alongside strong recovery in subjective and monetary measures of household welfare. The results further show that current migrants are more likely to send remittance payments when household members have deteriorating life satisfaction and/or subjective reports of worsening economic conditions at home. In the absence of remittance income, the poverty rate in Uzbekistan (measured at $3.2/day purchasing power parity) would be expected to rise from 9.6 to 16.8 percent, or to about 12.2 percent assuming (implausibly) that all current migrants were to find formal employment at the local prevailing median wage.

The World Bank’s analysis of cross-country data on human capital indicates that Uganda is underinvesting in the future productivity of its citizens. A child born in Uganda today will onlybe 38 percent as productive when she grows up as she could be if she enjoyed complete education and full health. Uganda is ranked among the countries in the lowest quartile of the Human Capital Index (HCI) distribution, with an index slightly lower than the average for the Sub-Saharan Africa (SSA) region, and below what would be predicted by its income level. Uganda’s low ranking in the HCI is mainly due to the country’s low education outcomes. A child born today in Uganda is expected to complete only 7 years of education by age 18, compared to a regional average of 8.1. Because of the low levels of learning achievement in Uganda, this is only equivalent to 4.5 years of learning, with 2.5 years considered as “lost” due to poor quality of education (as shown by thequality-adjusted years of schooling component of the HCI). Uganda’s score on this componentis the lowest amongst the comparator countries and below the SSA average.

With an estimated 724 million extreme poor people living in developing countries, and the world's demographics bifurcating into an older North and a younger South, there are substantial economic incentives and benefits for people to migrate. There are also important market and regulatory failures that constrain mobility and reduce the net benefits of migration. This paper reviews the recent literature and proposes a conceptual framework for better integration and coordination of policies that can address the different market and regulatory failures. The paper advances five types of interventions in need of particular attention in design, implementation, and evaluation; namely, (1) active labor market programs that serve local, regional, and foreign markets; (2) remittances and investment subsidies to promote job creation and labor productivity growth; (3) social insurance programs that cover all jobs and facilitate labor mobility; (4) labor taxes to internalize the social costs of migration in receiving regions; and (5) more flexible private sector driven schemes to regulate the flow of migrants and minimize irregular migration.

Somalia is on the path to political and security stabilization after more than two decades of civil war and conflict. Opportunities to ensure a development trajectory face many challenges since the country remains a fragile state subject to multiple shocks. Widespread poverty and food insecurity is a recurring developmental issue. Displacement is a key feature of modern Somali history linked to multiple drivers, including recurrent exposure to internal conflict and environmental hazards. Somalia is urbanizing rapidly due to large-scale forced displacement and economic migration that have driven large numbers of Somalis toward the urban areas. Remittances are central to the Somali economy and provide a lifeline to some segments of the population but not the most vulnerable. The World Bank implemented the second wave of the Somali high frequency survey (SHFS) in 2017-2018. This report is based on the most recent and first extensive household survey, wave 2 of the SHFS. The report is organized into six chapters. The first chapter presents an updated profile of monetary and nonmonetary dimensions of poverty for the Somali population, including the nomadic population. The second chapter explores in more detail spatial variation, with a focus on urbanization. The third chapter examines the impact of the 2016-2017 drought on livelihoods to identify the populations at risk and the factors that protected households against its negative effects. The fourth chapter provides an in-depth analysis of the internally displaced populations to identify displacement-related needs and to inform durable solutions. As a reaction to the analysis of poverty and vulnerabilities, the fifth chapter focuses on social protection as a means of promoting equity and building resilience against the effect of shocks on livelihoods. Similarly, the sixth chapter examines remittances and their role for livelihoods and resilience.

Financial capability, as defined by the World Bank Group (WBG) in this report, is the capacity to act in one’s best financial interest, given socioeconomic and environmental conditions. Improving financial capabilities has become a priority for policy makers seeking to promote financial inclusion, financial stability, and the smooth functioning of financial markets. In response to a request from the Central Bank of Haiti (Banque Centrale de la Republique d’Haiti) (BRH), the World Bank has conducted a financial capability and inclusion survey. The BRH has identified the low levels of financial capabilities and financial inclusion as priority areas for reform. This survey constitutes a key diagnostic tool that aims to guide the authorities in developing a detailed implementation action plan for improving financial capability and inclusion levels. The report covers following main areas: chapter one provides a brief overview of the methodology used and the composition of the sample. Chapter two assesses the level of financial inclusion in Haiti, including a more detailed look at the uptake of individual products, and chapter three assesses varies aspects of financial capability in Haiti. Chapter four summarizes the findings and makes recommendations for the development of an action plan for financial education.

The Angolan economy is at a significant juncture. The current growth model based on oil wealth is nearly exhausted and has not delivered inclusive growth and shared prosperity. Angola faces two broad policy challenges that need to be addressed urgently: macroeconomic stabilization and a more inclusive economic growth. The internal and external imbalances following the adjustment to lower oil prices pose a challenge to macro-stabilization. The prospect of volatile oil prices and potentially diminishing oil reserves over the medium and long-term call for a new sustainable and inclusive growth model that promotes economic diversification, a model that is less dependent on natural resource exports. The new administration is aware of these challenges and has started to implement much needed reforms. Angola is right to focus on reforms that lay the foundation for long-term macroeconomic stability and economic diversification. Analyses conducted as part of this report indicate that there are significant gains to be had from such reforms. The objective of this report on Angola is to support policy makers in their reform efforts. The report is organized as follows: Chapter 1 takes stock of recent trends and determinants of growth in Angola, highlighting the importance of natural resource wealth and volatility for growth outcomes. Chapter 2 presents the findings of a growth diagnostic for Angola, and highlights low human capital, access to finance, weak institutions and macroeconomic instability as critical and binding constraints for the non-oil economy. Chapter 3 uses product space analysis to evaluate Angola’s current and future potential for economic and export diversification, drawing attention to products and services sectors in which there is potential for export upgrading and/or product innovation. Chapter 4 provides an overview of the agriculture sector and assesses its potential for economic diversification. Chapter 5 sets out the way forward, identifying: critical reforms for macroeconomic stability; a fiscal framework for natural-resource wealth management; and macro-financial stability.

The Nepal Development Update is produced twice a year with the following two main aims: to report on key economic developments over the preceding months, placing them in a longer-term and global perspective; and to examine (in the Special Focus section) topics of particular policy significance. The Update is intended for a wide audience including policy makers, business leaders, the community of analysts and professionals engaged in economic debates, and the general public.

Remittances are an important source of income for households in the Southern African Development Community (SADC), as well as a crucial source of foreign exchange for countries in the region. Despite the relatively large inflows of remittances to SADC, the cost of sending money to and within the region is significantly higher than other regions in the world. To address the high cost of remittances globally, the World Bank has been involved in a number of initiatives aimed at improving the efficiency and safety of the market for remittances. At the regional level, the SADC Committee of Central Bank Governors (CCBG) has led several initiatives aimed at enhancing the regional payment system infrastructure, also with a focus on reducing the cost of remittances within the region.

The strong economic performance of Sub-Saharan Africa’s resource-rich countries since the start of the 21st century has been celebrated as a return to more buoyant growth and renewed convergence with the advanced economies.Despite the recent progress in improving living standards and reducing poverty, achieving high and sustainable growth continues to be the main challenge for policymakers.Rwanda and Ethiopia have led Sub-Saharan Africa (SSA) in terms of per-capita growth since 2000, growing faster than South Asia. However, the gap between the resource-rich countries of Africa with East Asia and the Pacific (EAP), SAR, and the advanced economies has widened since 2010, underlining the difficulty of accelerating growth.Africa has often been portrayed as a continent of boundless natural riches that have helped pull the whole subcontinent forward. Indeed, resource-rich Africa accounts for a dominant part of SSA’s economy. Resource-rich SSA accounts for 70 percent of both the subcontinent’s GDP and physical capital, 60 percent of its natural capital, and nearly 40 percent of its population. For the continent in aggregate and in per capita terms, however, natural resources are just a bit higher than in the South Asia Region (SAR) and lag all other developing regions.One way of thinking of strengthening economic growth depends on more exploration and development of natural resources that should help increase the continent’s natural wealth, as has happened in many other developing regions.More importantly, durable prosperity in resource-rich Africa depends on building up the assets, or components of overall wealth, that are in relatively short supply. In recent years, the literature has started to focus on assets and assets diversification as a path to development, and the World Bank has led in this area. In this report, we emphasize the two complementary types of assets that Africa’s resource-rich countries need to build up to accelerate growth: one is within national borders and the other across borders.

Through substitution and income effects, remittances can alter an individual's allocation of time between market activities and household production, decreasing labor supply. This paper uses propensity score matching and household surveys for 2006 and 2014 to estimate the impact of remittances on labor supply in the three countries of the Northern Triangle (El Salvador, Guatemala, and Honduras). The results show that remittances are associated with a reduction in labor force participation, particularly among women. This effect is largest for Salvadoran women (13 percentage points). A sensitivity analysis finds that the negative effect on labor force participation rates of men in El Salvador and Guatemala and women in El Salvador is robust to potential selection bias. Receiving remittances is also associated with a lower likelihood of young adults being in school or at work, with this effect being robust to selection bias for young men in Guatemala. At the same time, the evidence suggests that remittances may be supporting small enterprises and self-employment in El Salvador and Guatemala. The analysis does not find robust evidence of remittances affecting the labor supply in Honduras in 2014.

This paper presents an analysis of the effect of remittances on the current account in developing and emerging economies, incorporating an assessment of the extent to which exchange rate regimes impact the relationship. The main findings suggest there is a positive effect of remittances on the current account contemporaneously, but that the lagged effect is negative, which could be indicative of the existence of some underlying mechanisms characteristic of the Dutch disease phenomenon. In addition, the results show that a more flexible exchange regime dampens the contemporaneous positive effect that remittances have on the current account. The paper, therefore, asserts that policy makers face trade-offs pertaining to the use of exchange rate policy in managing the effects of remittances on the current account, which should be given due consideration when such policy choices are made.

Landlocked and mountainous, Tajikistan has a young—and mostly rural—population of about 8.7 million and GNI per capita of USD 1,100 in 2016, making it a lower middle-income country. In 2016, Tajikistan launched the National Development Strategy of the Republic of Tajikistan for the Period Up To 2030 (“NDS 2030”) laying out its master plan of the country’s future economic development. This systematic country diagnostic (“SCD”) identifies the most critical challenges and opportunities facing Tajikistan as its strives to raise the population’s living standards through the implementation of NDS 2030. Specifically, the SCD will answer the following three questions: (i) what are the key constraints to achieving inclusive and sustainable growth as envisaged in the NDS 2030; (ii) what are the main risks; and (iii) what priority areas can Tajikistan focus on to have the largest impact on sustainable economic and social development?

International connections through trade, foreign direct investment, migration, the Internet, and other channels are critical for the transmission of knowledge and growth and form macroeconomic linkages. But how much knowledge is transmitted to a country is not only the result of the overall level of connectivity, but also to whom a country is connected, as well as how these connections complement each other. For example, being well-connected to an economy with wide-reaching global connections is likely to be a stronger conduit for knowledge transfers than being connected to an isolated economy. Likewise, connections are likely to complement each other. For example, ecommerce is often seen as a benefit of Internet connectivity, but without transport connectivity, ecommerce may not amount to much. This wider definition of connectivity, referred to as multidimensional connectivity, is broadened and explored in this study as it applies to Europe and Central Asia. Focusing on countries from the Europe and Central Asia region, the paper shows that multidimensional connectivity is an economically and statistically important determinant of future economic growth. The paper further discusses the potential risks and transfer of shocks that can result from cross-country economic connectivity. Furthermore, it provides some examples of how policy tools can be designed to leverage the benefits of connectivity channels and mitigate their risks.

The Little Data Book on Financial Inclusion 2018 is a pocket edition of the Global Findex database published in 2018. The data represent a third round of data collection since the Global Findex database was launched in 2011. The database provides nationally representative, demand-side data on access to and use of accounts, credit, payments, and savings by adults age 15 and above in 144 economies. In addition, new indicators measure how people make or receive digital payments. This book presents data for selected indicators by country, region, and income group. For some indicators the data are disaggregated by gender, income level, employment status and rural residence. This third edition of the database was compiled in 2017 and includes updated indicators on access to and use of formal and informal financial services and additional data on financial technology, or fintech, including the use of mobile phones and the internet to complete financial transactions.

The basic economic model of labor supply has a very clear prediction of what should be expected when an adult receives an unexpected cash windfall: they should work less and earn less. This intuition underlies concerns that many types of cash transfers, ranging from government benefits to migrant remittances, will undermine work ethics and make recipients lazy. This paper discusses a range of additional channels to this simple labor-leisure trade-off that can make this intuition misleading in low- and middle-income countries, including missing markets, price effects from conditions attached to transfers, and dynamic and general equilibrium effects. The paper uses this as a lens through which to examine the evidence on the adult labor market impacts of a wide range of cash transfer programs: government transfers, charitable giving and humanitarian transfers, remittances, cash assistance for job search, cash transfers for business start-up, and bundled interventions. Overall, cash transfers that are made without an explicit employment focus (such as conditional and unconditional cash transfers and remittances) tend to result in little to no change in adult labor. The main exceptions are transfers to the elderly and some refugees, who reduce work. In contrast, transfers made for job search assistance or business start-up tend to increase adult labor supply and earnings, with the likely main channels being the alleviation of liquidity and risk constraints.

This systematic country diagnostic (SCD) examines the key constraints to and opportunities for accelerating poverty reduction and enhancing shared prosperity in Nepal. The SCD builds on a broad body of analytical work conducted in Nepal, but particularly on three World Bank reports published in 2017: moving up the ladder: poverty reduction in Nepal, climbing higher: toward a middle-income Nepal, and the Nepal risk and resilience assessment. It also builds on evidence compiled in six working groups and consultations and surveys in all seven Nepalese provinces with civil society organizations, the private sector, government, development partners, and citizens. The SCD highlighted key knowledge gaps. The key knowledge gaps include: (a) poverty trends since the earthquake, blockade, and slowdown of remittances; (b) how best to increase the accountability and strengthen the capacity of local governments; (c) the impact of lack of competition in specific sectors on job creation, prices, and welfare; (d) the potential for reducing environmental vulnerability through investments and of what type; (e) the political economy of multiple ministries in natural resource management and how to encourage consolidation; (f) which interventions are most effective to reduce malnutrition in different parts of the country; and (g) how to make the cost of migration more affordable for poor households.

This paper presents key findings on the international experience with migration, focusing on the implications for a developing nation that is a country of origin. The paper identifies several areas of impacts: (1) increases in wages of individual migrants; (2) remittances; (3) impacts on skills and skill formation – those leaving acquire skills to enhance ability to migrate, and those returning often do so with acquired skills and work experience. Additional impacts also arise on the macroeconomy and on growth of the economy through channels like the use of remittances as collateral, and trade identification and facilitation through migrants. The paper explores the different migration regimes along the spectrum of two polar cases of purely managed and purely unmanaged migration, and focuses on two possible aspects of managed migration: (1) migrants’ social networks, which amplify and propagate the initial actions on migration by the managed systems; and (2) skills and certification systems typically associated with managed systems.

To move funds internationally, banks rely on correspondent banking relationships (CBRs), roughly defined as the provision of banking services by one bank (the correspondent) to another bank (the respondent). CBRs are essential to international payments and provide an essential nexus between local economies and jurisdictions and the international financial system. They underpin international trade, remittances, and humanitarian financial flows among countries and are therefore particularly relevant to developing countries to support economic growth and development. Since the global financial crisis of 2008, global banks have been reviewing their CBRs and many have decided to terminate or limit their correspondent banking services (also known as derisking) to different regions, jurisdictions, or categories of clients.