Using Remittance Transaction Data for Timely Estimation of the Foreign Worker Population in Malaysia
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 dat...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/726721591929703728/Using-Remittance-Transaction-Data-for-Timely-Estimation-of-the-Foreign-Worker-Population-in-Malaysia http://hdl.handle.net/10986/33913 |
| Summary: | 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. |
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