Remittances‐Adjusted Support Ratio

Abstract

We introduce a new demographic indicator, the remittances‐adjusted support ratio (RASR), which incorporates the support offered through remittances into the existing support ratio (SR). Remittances have increased rapidly in recent decades due to improved technology, and they play a crucial role in the countries that send migrants abroad. This is important as many countries are still undergoing their demographic transitions, and here remittances are particularly relevant. Our formulation of the RASR suggests an alternative in which population pressures are alleviated through migration, but where migrants send remittances and thus provide support without being present in their home countries. We show that the RASR has diverged substantially from the SR in a range of countries during the last three decades. The RASR, therefore, offers new insight into economic and demographic support and constitutes a useful tool for policymakers and researchers in the 21st century.