Why Countries Sign Bilateral Labor Agreements

Abstract

Countries have entered several hundred bilateral labor agreements (BLAs), which control the conditions under which source countries send migrant workers to host countries. What has not been fully explained, or empirically tested, is why countries would sign these agreements. We conduct a statistical examination of these agreements using an original data set of 582 BLAs entered into from 1945 to 2015. We find that the standard explanation for BLAs — that they are likely to be formed when potential host countries are dramatically wealthier and more repressive than potential source countries — is true for host countries in the Middle East, but this pattern does not hold for other countries that have formed BLAs. We also find evidence that countries that enter BLAs experience greater migration flows than countries that do not, though we are not able to verify that the BLAs cause this difference.