since key economic and labor market indicators in Egypt are unaffected by oil prices’ In Figure 1 in Panel B, we present a scatter plot featuring the evolution of the inflation adjusted oil prices and migration patterns from the 1960s to 2010. The share of migrants is derived from the ELMPS (2012), using information on both current and return migrants, and on the year of migration. The fitted regression line shows a positive correlation between oil prices and the share of migrants. While Panel A provides support to the exclusion restriction of oil prices, Panel B shows that oil prices constitute indeed a strong predictor of migration decisions.

A potential threat to identification would be the non-orthogonality of oil prices (1) to legal status of migrants, or (2) to return decisions. We discuss these two issues and present evidence supporting the orthogonality of oil prices to these two decisions. In Figure 2 in Panel A, we present the yearly evolution of oil prices and the percent of illegal migrants derived from the ELMPS.<sup>21</sup> If oil price shocks directly affect the probability of illegal migration, this would suggest that when oil prices are high, Egyptian migrants might be more frequently willing to emigrate irregularly since it would be more profitable. Panel A in Figure 2 shows that the two series—oil prices and the share of illegal migrants—do not follow the same trend. Indeed, this figure shows several episodes of spikes in oil prices, during which irregular migration remained low. Conversely, irregular migration was particularly high in the late 1960s and early 1970s—a period with relatively low oil prices. We further corroborate this evidence in Panel B, where we present a scatter plot on the relationship between oil prices and the share of illegal migrants from the 1960s to 2010. Panel B in Figure 2 additionally confirms the orthogonality of oil prices with respect to irregular migration flows. Indeed, there does not seem to be any correlation between oil prices and illegality. We find a correlation coefficient of 0.042 with an associated P-value of 0.787.

For the validity of the identification strategy, we additionally discuss the issue of non-orthogonality of oil prices to return migration decisions. A potential concern would be if individuals who migrate with high oil price may also be more likely to return when oil prices go down. In Figure 3 in Panel A, we present the evolution of oil prices against the evolution of both the share of return migrants and the share of migrants from the late 1960s to 2012. While we find that the share of migrants closely mimics oil price fluctuations, we do not find a clear association between oil price shocks and the share of return migrants. While return migration seems to have peaked in the late 1980s following the drop in oil prices, it likewise peaked again in the late 2000s even though oil registered particularly high price levels. The direction of the association between oil prices and return migration is therefore not a priori clear.

> 21 The percent of illegal migrants is computed as the number of illegal migrants in a specific year to the total number of migrants in the same year, using information on current, return migrants, and the year of migration.

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