Labour market, social welfare, and migrant remittance: COVID-19 implications in the UK

Abstract

Immediately after the COVID-19 pandemic was declared by the World Health Organization on 11 March 2020, most countries took measures to prevent international human mobility. While the economic consequences of the pandemic significantly reduced remittances sent by migrants through formal channels, restrictions on human mobility almost halted the cross-border movements of remittances through informal channels. Policy measures related to the labour market and social welfare practices have also played determining roles in remittance transfers. This paper aims to examine how the labour-market participation of migrants and pandemic-induced financial support affect remittances sent migrants to their home countries during the COVID-19 outbreak. The author used an inductive approach and analysed qualitative data from two groups of Turkish migrants with different status in the UK labour market. The findings demonstrate that during the COVID-19 pandemic measures to restrict human mobility, migrants’ income/job losses, and dependence on tightly regulated financial support can have devastating effects on remittances sent from the UK to Turkey through both formal and informal channels. This study contributes to remittance literature by evincing the vicious cycle of irregularity in the relationships among remittances, labour markets, and welfare regulations in host countries. In countries with a tight regulatory system, irregularity in the labour market brings about irregularities in money transfers. In possible future events where there is a high probability of an economic downturn and travel restrictions, such as pandemic, natural disasters, armed conflicts and so on, especially for migrants, it is important to set a minimum base wage which can be referred to as ‘Temporary Basic Income Support’. This policy proposal is important as measures that facilitate remittance transfers through formal channels, are one of the most important means of reducing global inequalities and disadvantages.