Banantika Datta and Rupa Chanda
Countries face skill shortages in several sectors and rely on foreign workers to meet the domestic shortage of labour supply or skills. Thus, mobility has become increasingly important. Some implications go beyond movement to provide a service, as there are sensitivities about permanent migration, welfare, security, etc. Hence, the management of such a movement is important. Bilateral Labour Agreements or BLAs and the mobility provisions they include try to address the need for movement while allaying such concerns by ensuring temporariness. So, it is important to assess the impact of these provisions and agreements on bilateral labour flows or mode 4 based services trade. This paper studies the effect of BLAs on annual bilateral migration flows and addresses several estimation challenges through multiple specifications and robustness checks. We primarily examine the impact of labour provisions in Preferential Trade Agreements (PTAs) on mobility between the signing countries by using a new method to measure the ‘breadth’ and ‘depth’ of PTAs. To our knowledge, this is the first paper to measure breadth and depth of labour provisions using content analysis of PTAs. Using content analysis techniques, we seek to evaluate the impact of not only the existence of labour provisions but also the impact of broader and deeper labour provisions. In addition, we decompose the labour provisions in a way that allows us to isolate the true effect of labour liberalization policies from other labour provisions, like labour rights.
