Inflation to impact educational support from overseas workers

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WorldRemit recently connected with 3,000 international money senders to learn how inflation is impacting their daily behaviours and spending habits. The group listed educational support as one of the three primary reasons they send money overseas, but noted that as a result of the rising living costs, 52 percent now send money abroad to fewer people, with 72 percent now only sending to close family.

More than 244 million people are classified as immigrants around the world and account for large percentages of populations in countries like the United States (14.4 percent of total population), UK (9 percent), Australia (30 percent) and Canada (21.5 percent).

For the nearly 250 million people who live in different countries than their families, understanding the true cost of education is often top of mind.

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As such, planning for a child’s return to school can take months of financial planning for those working overseas to support family in their home country.

WorldRemit announced the results of its 2022 Cost of School study, observing how the changing macroeconomic environment has affected the true cost of education across 21 markets globally.

With the back-to-school season fast approaching, the study, first launched in August 2021, compares the average cost of basic educational needs with average annual incomes and fertility rates to determine the season’s financial impact on families around the world.

Of the 10 countries examined in both 2021 and 2022, four are considered developed countries: United Kingdom, United States, Canada, and Australia. The 2022 findings reveal the average household income decreased by 4 percent, fertility rates remained steady, and the cost of basic school supplies increased by more than 7 percent on average.

Of the remaining six countries indexed–Nigeria, Philippines, Mexico, India, Tanzania and Uganda– household income decreased by an average of 4 percent and fertility rates remained steady.

Meanwhile, the cost of school supplies ranged from a 57 percent increase year-over-year in India to a 40 percent decrease in the Philippines, while the average increase across the other countries hovered around 5 percent.

Across all 10 countries observed in both 2021 and 2022 studies, the dramatic increase of specific school items illustrates how inflation is hitting home on schooling costs and impacting families across the world, depending on how many items they needed to buy for this upcoming year:

In the Philippines, where families can expect to save overall, the cost of a single pencil increased by 33 percent year-over-year.

In the UK, the cost of a backpack more than doubled the amount, from $8.98 in 2021 to $19.03 in 2022; in Australia, the cost of a jumper increased by 266 percent, from $9.86 to $26.28.

In Mexico, families can expect to spend 10 percent more for school supplies this year, with significant increases observed in the cost of a water bottle (+264 percent), gym shoes (+200 percent) and pencil sharpeners (+29 percent); and in Nigeria, families can expect to pay 9 percent more in school supplies, with the item boasting the greatest percentage increase being a 30cm ruler (+30 percent).

To advance this annual study, WorldRemit observed eleven new countries, looking at the standard school supply costs.

Of these, Zimbabwe showed the highest costs relative to average family size and monthly income at nearly 700 percent of the average family household income. Other countries, including Morocco, Cameroon, Ghana, Kenya and Guatemala all can expect to pay more than 100 percent of their monthly household income on school supplies this season.

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