Work

The effect of the COVID-19 pandemic on remittances in Guatemala: A causal impact analysis

Year: 2025

Type: article

Abstract: Remittances constitute a major way in which migrants contribute to their family's well-being and stability. Almost 2 million people of Guatemalan-origin reside in the United States. In this paper we use monthly data spanning 2002-2024 published by the Bank of Guatemala to examine whether the receipt of remittances deviated from expected levels after the onset of the COVID-19 pandemic. The counterfactual is produced considering past trends and variation with time series that remained relatively stable during the post-pandemic period. Using Bayesian Structural Time-Series modeling and inferential causal impact, we find that remittances exceeded what was expected based on a counterfactual built using foreign currency reserves. Since the onset of the COVID-19 pandemic, remittances to Guatemala increased between 23% and 42% resulting in an additional 20.17 billion dollars when compared to expected levels. Our analysis suggests that this shock continues to have an effect even in December 2024. This is likely due to the earlier normalization of economic activities in migrant-hosting countries, a possible increase in the adoption of formal remittance channels, and expectations of continued support post-pandemic.

Source: Economics Letters

DOI: 10.1016/j.econlet.2025.112351

Authors: Alexis R. Santos-Lozada, Ernesto R. Cuxil

Institution: Pennsylvania State University

Language: English

Topic: Migration and Labor Dynamics

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $3,030