Western Union CEO Hikmet Ersek Discusses Migration and University
of Colorado Boulder Research Findings during World Economic Forum Annual
DAVOS, Switzerland--(BUSINESS WIRE)--
of Colorado Boulder Leeds School of Business, which includes the
Research Division, and The Western
Union Company (NYSE:WU), a leader in global payment services, today
announced the release of a first-of-its-kind study that sheds new light
on the positive impact of cross-border money transfer broadly and of
Western Union services in particular.
“Development experts have long debated the impact of the cross-border
person-to-person flow of funds. Although there is widespread consensus
that remittances help alleviate poverty among recipients, questions
remain about whether they promote overall economic growth,” said Dr.
Miles Light, a development economist at the University of Colorado
Boulder’s Business Research Division, who led the research. “We find
that the benefits related to remittances are larger than the costs, and
this study is distinctive in that we quantify multiple effects.”
The study looked at money transfers worldwide, and focused on the
Philippines, one of the top three recipient nations of official
remittances1, to create a model that could be used to
construct equivalent indicators for other countries. “Past scholarship
often has been limited to broadly-available data, while this research
pinpoints the impact of individual players in the cross-border money
transfer market,” Dr. Light said.
“We saw an opportunity to help advance understanding in the field as
part of our broader commitment to leadership in business and corporate
responsibility,” said Hikmet Ersek, President and CEO, Western Union.
“New insight is critical to creating effective programs around this
$542B annual global flow of funds, and to the one in seven people
globally2 who make up the mobile workforce.”
The study demonstrates that Western Union services have a positive
impact on society over the long term. Dr. Light’s preliminary findings
Each Western Union Agent location in the Philippines handles
transactions that infuse enough funds into the local economy to create
85 non-Western Union jobs.
When combined, the impact of these funds handled by Western Union
Agent locations account for 722,500 jobs in the Philippines.
Among lower-income households, on average, WU money transfers grow
nominal income by 14.5%, and welfare by 13.1%
WU money transfers also have price and secondary income effects that
benefit middle-to-high income households that do not receive money
transfers. On average, this population sees 0.4% growth in nominal
income and 0.3% growth in welfare, driven by remittances.
Remittance recipients tend to work less, presumably to attend school or
better support children or elderly relatives. This reduces the labor
supply, causing upward pressure on wages of those who do not receive
remittances. Labor supply for household income deciles 2-6 decline by
4.8%, on average, resulting in market wages increases, as follows:
? Low-skill wage rates:
? Semi-skilled wage rates:
? Skilled wages:
The full preliminary report is available here: www.colorado.edu/leeds/western-union.
For more on Hikmet Ersek’s panel participation at the World Economic
Forum, visit: www.weforum.org/sessions/summary/escaping-poverty.
About Western Union
The Western Union Company (NYSE: WU) is a leader in global payment
services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western
Union Business Solutions branded payment services, Western Union
provides consumers and businesses with fast, reliable and convenient
ways to send and receive money around the world, to send payments and to
purchase money orders. As of September 30, 2014, the Western Union, Vigo
and Orlandi Valuta branded services were offered through a combined
network of over 500,000 agent locations in 200 countries and territories
and over 100,000 ATMs and kiosks. In 2013, The Western Union Company
completed 242 million consumer-to-consumer transactions worldwide,
moving $82 billion of principal between consumers, and 459 million
business payments. For more information, visit www.westernunion.com.
World Development Indicators and World Bank Development Prospects Group
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20150122006349/en/
Source: The Western Union Company