Impacts on migrant household members and the home economy

families. Given the larger negative shock that families with returnees face, they were also significantly more likely to report using strategies such as cutting food spending to cope with the lower income. Healthwise, households with recent returnees also had a higher incidence of COvID-19-related symptoms and mental health issues, and were more likely to be left without the necessary health treatment.

IMPACTS ON MIGRANT HOUSEHOLD MEMBERS AND THE HOME ECONOMY

The global nature of the COvID-19 crisis has defied the historical countercyclical trends in remittance flows. The COvID-19 crisis has simultaneously hit sending and receiving countries, with ambiguous effects on remittances. On the one hand, migrants remit more when the needs of relatives and friends in the country of origin are higher (Gupta 2005). However, remittances are impacted by the number of emigrants and their ability to remit based on their savings and earnings (Clemens and McKenzie 2018). Given the reduction in the stock of Kyrgyz emigrants and their high income-exposure to COvID-19, remittance inflows to the Kyrgyz Republic saw their largest drops in recent history, with a year-on-year fall of more than 50 percent in the month of April (panel a of figure 2.13). However, remittances had bounced back since the summer of 2020, and the cumulative flows by October 2020 were only 2.3 percent lower than in the same month of 2019 (panel b of figure 2.13). In light of the continuing reduction of Kyrgyz emigrants to the Russian Federation until the third quarter of 2020 and the still-dire labor market situation in receiving countries, the rebound in remittances suggests a higher elasticity of foreign earnings to remittances of emigrants, perhaps financed by previous savings, in an increased effort to support the larger needs of household members in the Kyrgyz Republic.

At the household level, surveys show a widespread reduction in remittances in the first months of the pandemic, which had a severe negative impact on the welfare of migrant households. In the Russian Federation, Ryazantsev and Khramova (2020) found that 79 percent of migrants who used to send remittances stopped sending any money by the end of April 2020, very similar to the drop in remittances observed at the macro level during that month. In the Kyrgyz Republic, the National Statistics Committee survey in October 2020 shows that 16 percent of Kyrgyz households experienced a reduction in the amount of remittances received. Given that around 20 percent of Kyrgyz households were receiving remittances before the pandemic (KIHS 2018), this means that four in five households receiving remittances saw their income from this source reduced. Households with a family member abroad are particularly reliant on this source of income. The reduction in remittances affects households in the highest income quintiles (figure 2.14, panel a). However, as shown in this chapter, given the high dependency on this source of income among migrant families, a severe reduction in remittances could cause a rapid increase in poverty rates for these households. At the regional level, regions with a higher drop in remittances also reported higher overall income losses (figure 2.14, panel b), highlighting the role of remittances as a key source of income. Households that suffered a loss in remittances after the pandemic were more likely to resort to coping strategies such as cutting food spending,