Table 4: Heterogeneous migration response to BLAs

||GCC de|stination|Africa|n origin|Developm|ent group|
|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|
|Bilateral labor agreement (BLA)|0.468<sup>_∗∗∗_</sup>|0.552<sup>_∗∗∗_</sup>|0.650<sup>_∗∗∗_</sup>|0.640<sup>_∗∗∗_</sup>|1.522<sup>_∗∗∗_</sup>|1.414<sup>_∗∗∗_</sup>|
||(0.106)|(0.099)|(0.115)|(0.102)|(0.228)|(0.199)|
|BLA X GCC destination|1.558<sup>_∗∗∗_</sup><br>(0.413)|1.688<sup>_∗∗∗_</sup><br>(0.430)|||||
|BLA X African origin|||-0.568<sup>_∗∗_</sup><br>(0.240)|-0.500<sup>_∗∗∗_</sup><br>(0.170)|||
|BLA X UM-HIC|||||-1.351<sup>_∗∗∗_</sup><br>(0.251)|-1.200<sup>_∗∗∗_</sup><br>(0.221)|
|BLA + Interaction|2.026<sup>_∗∗∗_</sup>|2.239<sup>_∗∗∗_</sup>|0.081|0.139|0.170|0.214<sup>_∗∗_</sup>|
||(0.398)|(0.417)|(0.211)|(0.136)|(0.105)|(0.093)|
|Observations|273,042|273,042|273,042|273,042|273,042|273,042|
|R-sq|0.820|0.839|0.820|0.875|0.820|0.875|
|Origin country x decade FE|Y|Y|Y|Y|Y|Y|
|Destination country x decade FE||Y||Y||Y|
|Origin x destination countries FE|Y|Y|Y|Y|Y|Y|

_Notes_ : Standard errors in parentheses are clustered at the origin-destination level. BLA (dummy) in decade N takes the value 1 if a BLA was signed in the last 10 years and zero otherwise. The dependent variable is the number of dyadic migrations in protocols. Columns (1) and (2) report heterogeneity with respect to whether the country of destination is in the GCC or not. Columns (3) and (4) report the heterogeneous response of migration to BLA depending on whether country of origin is Africa or not. The last two columns examine the heterogeneity with respect to the level of development of the country of origin (low and lower middle income, upper middle income, and high income). For each of the highlighted categories, we consider two specifications: one that includes origin-destination and origin-time fixed effects, and another that complements this set of fixed effects with destination-time fixed effects.<sup>_∗_</sup> _p <_ 0 _._ 05,<sup>_∗∗_</sup> _p <_ 0 _._ 01,<sup>_∗∗∗_</sup> _p <_ 0 _._ 001.

migration to the GCC countries. Consequently, whenever a GCC country enters a BLA with another country, nearly all variations in migration flows in that corridor are explained by the BLA. Table 4 reports the heterogeneous migration response to BLAs along the three dimensions indicated.

Furthermore, we investigate whether BLAs have so far affected migration flows from Africa. However, BLAs do not seem to have a significant effect on migration flows from Africa (columns 3 and 4). This finding is intriguing, given that African countries make up a substantial portion of low- and lower-middle-income countries, which generally experience the largest migration increases in response to signing a new BLA (columns 5 and 6). This heterogeneous effect illustrates what we refer to as the “ _African Puzzle_ ”. On one hand, BLAs increase migration flows, especially from LLMIC; on the other hand, there is no significant migration response to BLAs in Africa. This is somewhat puzzling given that of the 79 countries classified as low- and lower-middle-income in our sample, 45, or more than half, are in Africa.

To better understand this “puzzle”, we further investigate whether the quality of institutions 17