Contract Enforcement and Migration
Ejecución de contratos y migración
ABSTRACT
This paper studies how stronger cross-border contract enforcement affects international migration. We use countries’ ratification of the New York Convention as a proxy for better enforcement of foreign arbitral awards. Using bilateral migration data for 1946-2011 and Poisson models, we find that ratification significantly increases migration inflows, especially for women. For men, the effect appears only in developing countries. For women, it is positive in both developed and developing countries, and stronger in the latter. Overall, contract-enforcement institutions play an important role in shaping migration flows.
Keywords: international arbitration · migration · institutional quality · New York Convention.
JEL: F22 · F53 · K33 · O15.
RESUMEN
Este artículo analiza cómo una mayor ejecución transfronteriza de contratos afecta a la migración internacional. Utilizamos la ratificación de la Convención de Nueva York como indicador de una mejor ejecución de laudos arbitrales extranjeros. Con datos bilaterales de migración para 1946-2011 y modelos Poisson, encontramos que la ratificación incrementa significativamente las entradas migratorias, especialmente entre las mujeres. En los hombres, el efecto solo aparece en países en desarrollo. En las mujeres, es positivo tanto en países desarrollados como en desarrollo, y más fuerte en estos últimos. En conjunto, las instituciones de ejecución contractual desempeñan un papel importante en la configuración de los flujos migratorios.
Palabras clave: arbitraje internacional · migración · calidad institucional · Convención de Nueva York.
1. Introduction[Up]
The importance of migration for the global economy is reflected in the large number of migrants participating in the global labor force. In 2022, there were 167.7 million migrant workers—almost 5% of the world’s workforce—an amount comparable in size to the entire labor force of the United States (International Labour Organization [ILO], 2024). Migration generates significant economic, societal, and human impacts (World Bank, 2023). As described by the Organisation for Economic Co-operation and Development [OECD] (2014) and others, migrants boost the working-age population, bring skills, and contribute to technological progress and innovation (Foley & Kerr, 2013; Cuadros et al., 2022), as well as to trade (Gould, 1994) and investment (Javorcik et al., 2011; Cuadros et al., 2016, 2019). At the same time, concerns persist regarding the effective integration of migrants and the potential implications of migration for social cohesion (Bauloz et al., 2019). Origin countries also benefit, particularly through remittances, but there are longstanding worries that some of the poorest countries may be disadvantaged when their most highly skilled workers seek employment abroad (Belot & Hatton, 2012).
Given its global relevance, the determinants of migration flows have been extensively studied. Prior research identifies a wide range of drivers, including economic and demographic conditions in origin and destination countries, as well as the costs and barriers associated with moving between them. Factors such as poverty, unemployment, demographic pressures, wage gaps, labor demand, social networks, and migration policies play central roles (Massey et al., 1993). The role of institutions has attracted growing attention. Ashby (2010) finds that differences in economic freedom are positively associated with bilateral migration, a finding reinforced by Naghsh Nejad and Young (2016). Cooray and Schneider (2016) show that corruption increases emigration among high-skilled workers. Ariu et al. (2016) find that institutions affect both outflows and inflows: better home-country institutions reduce emigration, and the importance of institutions varies across skill levels of migrants. Similarly, Bergh et al. (2015) conclude that weak institutions serve as a push factor. Overall, the literature emphasizes that economic, political, and social institutionsshape migrants’ decisions; individuals may migrate when institutional conditions improve in a destination country or deteriorate at home (Arif, 2020; Hagen-Zanker et al., 2025).
Despite this attention, the role of contract enforcement in shaping migration flows has received limited study, even though contract-enforcement institutions clearly facilitate other cross-border flows such as trade and foreign direct investment (FDI). This paper fills that gap by examining how improvements in international contract enforcement—proxied by a country’s adoption of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC)—are associated with migration patterns. The NYC improves the enforceability of arbitral awards arising from cross-border commercial disputes, substantially strengthening firms’ ability to rely on international arbitration. Prior research shows that adoption of the NYC boosts exports and FDI, likely by improving contracting environments. These improvements can raise labor demand and wages in adopting countries, which in turn may influence migration flows. Thus, the NYC provides a useful institutional setting through which to analyze how contract enforcement affects migration.
The paper first outlines the mechanisms through which contract-enforcement institutions may influence migration. It then examines how NYC adoption affects total, male, and female migration inflows using bilateral migration flows data from the DEMIG C2C database and institutional covariates from the USITC Dynamic Gravity Dataset. The data span 1946-2011, covering both the pre-NYC period and the decades during which most countries adopted the Convention.
Our identification strategy exploits cross-country variation in the timing of NYC ratification to assess whether strengthened international contract-enforcement institutions influence migration decisions. The baseline results show that NYC ratification is associated with statistically significant increases in total and male migration inflows, with female inflows increasing even more strongly across all countries. Interaction models reveal substantial heterogeneity: in developing countries, NYC ratification leads to pronounced increases in both male and female inflows, whereas in developed countries the effect on male inflows becomes insignificant and the positive effect on female inflows, although still present, is notably smaller. These findings underscore that the migration response to improved contract enforcement varies systematically with countries’ development levels and migrant characteristics.
The rest of the paper is structured as follows: Section 2 reviews the related literature. Section 3 describes empirical methods and data. Section 4 presents the results, and Section 5 concludes.
2. Background[Up]
Contract-enforcement institutions play an important role in shaping trade and foreign direct investment (FDI), both of which affect employment and wages. This provides a mechanism through which improvements in contract enforcement may influence migration. Contract enforcement operates through courts and arbitration systems that facilitate the development and implementation of contracts. Anderson and Marcouiller (2002) show that weak contract enforcement raises transaction costs and reduces trade volumes. Similarly, Levchenko (2007) highlights the importance of institutional differences as a determinant of trade flows, and Nunn (2007) finds that “contract enforcement explains more of the global pattern of trade than countries’ endowments of capital and skilled labor combined.” This literature has been extended to FDI: Ahlquist and Prakash (2010) find that foreign direct investment is higher where contract-enforcement costs are lower, particularly in more indebted countries.
A central component of modern contract enforcement is arbitration, which is underpinned by the New York Convention (NYC). Arbitration is especially important for cross-border commercial contracting. Berkowitz et al. (2006) note that approximately 80% of private international contracts include arbitration clauses, and the international business community views arbitration as the “normal means of settling disputes arising from international transactions” (Casella, 1996). Foreign firms are often reluctant to rely on unfamiliar domestic courts, making arbitration an attractive alternative. The legal foundation for international commercial arbitration is the NYC, which obliges signatories to recognize and enforce foreign arbitral awards, subject to narrow exceptions. By ensuring enforceability, the NYC has been crucial in promoting the widespread use of arbitration, especially since the late 1950s when the Convention came into force (Casella, 1996). The economic importance of the NYC is well documented: Moenius and Berkowitz (2011) find that it increases trade in more complex products, while Myburgh and Paniagua (2016) show that NYC adoption is associated with higher FDI inflows.
Adoption of the NYC may affect migration flows by raising employment and wages in adopting countries. As extensively discussed in the migration literature, including in Massey et al. (1993), wages and employment conditions in both origin and destination countries strongly influence migration decisions. Contract enforcement can stimulate trade and FDI, which in turn can raise wages. Improved contract enforcement is known to promote investment in contract-intensive sectors (Nunn, 2007), many of which participate in global value chains (Dollar & Kidder, 2017) and generally pay higher wages (Kruse et al., 2023). FDI also tends to raise wages because foreign-owned firms are more productive, more skill-intensive, and operate at higher standards than domestic firms (Javorcik, 2015). By contrast, improvements in commercial contract enforcement are unlikely to directly affect the enforcement of contracts that facilitate migrants’ journeys. While some migrants enter into contracts—such as forms of indentured labor—these agreements are not enforced through international commercial arbitration, and therefore the NYC has little direct effect on them.[1]
As our study focuses on migration, it is important to consider gender differences. International migration has become increasingly feminized due to rising educational attainment among women, growing demand for female labor in health care and service sectors, and evolving social attitudes toward female migration. Nonetheless, during much of the period examined in this paper, women represented a relatively small share of the global migrant workforce. Gender matters because male and female migrants do not respond uniformly to economic or social push factors (Docquier et al., 2012). Gender shapes motivations for migration, who migrates first, the networks they rely on, the opportunities they face in destination countries, and the nature of their ties to the origin country. As a result, the costs and benefits of migration are often gender specific. For example, social networks—an important mechanism facilitating migration—appear more critical for women, who rely more heavily on relatives and friends for support, information, protection, and guidance upon arrival (Curran & Rivero-Fuentes, 2003). Migration is also frequently a household decision: individuals migrate not only to maximize income but also to reduce risks (Gheasi & Nijkamp, 2017). Previous work shows that men are more likely toaspire to migrate than women and are more likely to move first over longer distances; women often follow later, frequently through family reunification programs (Curran & Rivero-Fuentes, 2003; Aslany et al., 2021; Docquier et al., 2012). Women also tend to migrate over shorter distances, including within a region or between geographically proximate countries.
3. Data and methods[Up]
To evaluate the association between cross-border contract enforcement and migration, this paper examines how ratification of the NYC is related to migration flows. The analysis draws on bilateral migration data from the DEMIG C2C database and institutional covariates from the USITC Dynamic Gravity Dataset. We estimate Poisson Pseudo-Maximum Likelihood (PPML) models, which are well suited for migration data because they accommodate zero flows and address heteroskedasticity (Santos Silva & Tenreyro, 2006; Beine et al., 2016). The identification strategy exploits cross-country variation in the timing of NYC ratification to assess whether stronger international contract-enforcement institutions are associated with changes in migration inflows.
Model specification[Up]
The baseline specification is:
[1]
where inflow denotes migration inflows to country j at year t; NYC is a dummy variable equal to one if the country j has ratified the New York Convention; gdpcap is the Gross Domestic Product per capita of country j in year t; GATT is a variable that takes the value of 1 if the country j is a member of the GATT/WTO in year t; and EU is a dummy variable that takes the value of 1 if the country j is a member of the European Union in year t; αt is a set of year dummies to control for any common time trends and εjt is the error term. The unit of observation is the destination–year. Migration inflows are aggregated over all origin countries, reflecting total labor supply responses to changes in destination-country institutions.
Finally, to assess heterogeneity by development level, we estimate an interaction model:
[2]
where X represents the set of control variables in equation [1] and LessDeveloped is a dummy variable that takes the value of 1 if country j is a less developed country, according to the World’s Bank definition.
Each model is estimated separately for male, and female migration inflows. Standard errors are clustered at the country level.
Data[Up]
The inflow of migrants is measured using migration flow data from the DEMIG C2C database, which provides annual country flows for up to 34 reporting destination countries and as many as 236 origin countries from 1946 to 2011. The database also includes gender-disaggregated flows for many country pairs, although coverage varies across countries and years.
The DEMIG C2C database reports country-to-country migration flows, but coverage varies substantially across destination countries, years, and migrant characteristics. Importantly, the database is not fully dyadic and does not provide complete bilateral coverage for all country pairs. Moreover, gender-disaggregated migration flows are available only for a subset of destination–year observations.
Our analysis therefore focuses on destination–year migration inflows aggregated across all origin countries. To ensure consistency across specifications, we restrict the sample to destination–years for which both male and female inflows are reported. Total migration inflows are constructed as the sum of male and female inflows. All region-level entries in the original database are excluded prior to aggregation.
As a result, the number of observations reported in the regression tables reflects the availability of gender-disaggregated data, the destination–year structure of the analysis, and variation in reporting across countries and over time, rather than the number of bilateral country pairs in the raw DEMIG dataset.
Macro-economic and institutional controls, including gdpcap, GATT, and EU, are taken from the Dynamic Gravity Dataset (DGD) and the associated gravity data portal maintained by the United States International Trade Commission (USITC). This dataset offers extensive bilateral information for the period 1948–2019, covering macroeconomic indicators, geographic characteristics, institutional features, and trade-facilitation variables. Information on countries’ ratification of the New York Convention (NYC) is drawn from the list of Contracting States published on the New York Convention website and the United Nations treaty-status repository. The NYC indicator is coded as a dummy that switches to one upon ratification or accession and remains constant thereafter; in the empirical analysis, it is indexed by origin country j.
Figure 1 shows the long-run evolution of average global male and female migration inflows per destination, highlighting both their similarity in levels and their co-movement over time. From the early 1900s until the mid-1950s, total inflows rise steadily for both groups, with virtually no gender gap. Beginning in the 1960s and especially through the 1970s and 1980s, male inflows become slightly larger and more volatile than female inflows, reflecting periods of labor-demand shocks and guest-worker programs that historically targeted male migrants. Despite these fluctuations, the two series remain tightly correlated, moving together across major migration waves, including the surges of the late 1960s, mid-1970s, early 1990s, and mid-2000s. Female inflows consistently track male inflows and, in several periods—particularly after 1990—nearly converge, reflecting the global rise of family reunification channels and the growing feminization of migration. The sharp decline at the end of the series reflects the effect of the global crises along with possible incomplete reporting for the most recent years. Overall, the figure illustrates that while men historically dominated migration numerically, the gender gap has narrowed substantially over time, with female migration now closely mirroring male migration dynamics.
FIGURE 1
AVERAGE MALE AND FEMALE MIGRATION INFLOWS
SOURCE: Own elaboration with DEMIG C2C database data.
Figure 2 illustrates both the annual pattern of New York Convention (NYC) adoptions and the cumulative number of adopters over time. The dashed blue line shows substantial year-to-year volatility in the number of countries ratifying the Convention, with clusters of adoptions occurring in the late 1950s-1960s, again in the late 1980s-1990s, and a smaller wave in the early 2000s. These spikes reflect moments when groups of countries undertook broader legal or institutional reforms, leading to multiple ratifications within short windows.
FIGURE 2
NYC ADOPTION
SOURCE: Own elaboration.
The solid red line tracks the cumulative number of adopters and reveals a very different dynamic: a smooth, steadily increasing trajectory from the mid-1950s onward. This cumulative growth accelerates particularly after the 1990s, eventually reaching more than 150 contracting states. The contrast between the jagged annual adoption series and the smooth cumulative path illustrates that while individual ratification years are irregular, global membership in the NYC has expanded consistently over time. The figure therefore highlights both the episodic nature of adoption events and the long-term trend of widespread and sustained international convergence toward stronger cross-border contract enforcement.
The two figures together highlight how the global expansion of the New York Convention (NYC) coincides with major structural shifts in international migration flows. The first figure shows that male and female migration inflows have risen dramatically since the mid-20th century, with increasingly synchronized movements across genders and sharp surges during periods of global economic integration. The second figure reveals that these decades of rising migration align with the progressive worldwide adoption of the NYC, particularly from the late 1950s onward and accelerating after the 1990s. While annual ratifications occur in irregular bursts, the cumulative number of adopters increases smoothly and steadily, mirroring the long-run upward trajectory of migration flows. The parallel evolution of the two series—rapid growth in cross-border migration and widespread adoption of international contract-enforcement standards—underscores a key premise of the paper: improvements in the institutional environment governing cross-border transactions may have facilitated, or at least accompanied, the broader expansion of global mobility.
Development status is captured by a binary indicator, LessDeveloped, based on the World Bank classification. To ensure a consistent interpretation of heterogeneity and to avoid mechanical reclassification over time, countries are assigned to development groups based on their predominant status over the sample period. The indicator therefore remains time-invariant within countries. In our sample of destination countries, 59% are classified as less developed.
Identification relies primarily on cross-country differences in the timing of NYC ratification. Because NYC adoption is a largely permanent institutional change with limited within-country variation, and because our analysis focuses on cross-sectional heterogeneity by development status, we do not include destination fixed effects. Instead, we control for common global shocks using year fixed effects and interpret our results as correlational associations rather than causal estimates.
NYC ratification may coincide with broader institutional reforms that also affect migration, such as trade liberalization or improvements in regulatory quality. Our estimates therefore capture the association between migration inflows and a specific, internationally harmonized contract-enforcement reform, rather than the isolated causal effect of arbitration law alone. Including broad composite institutional indices would substantially shorten the sample period and risk absorbing the institutional channel of interest. We therefore interpret our results as correlational and discuss these limitations explicitly.
An important determinant of migration flows in dyadic models is the stock of previous migrants from a given origin residing in a destination country. Because our dependent variable aggregates inflows across all origins, and because consistent bilateral migrant-stock data are unavailable for the full sample period, we are unable to include a direct measure of migrant networks. Moreover, constructing aggregate network proxies at the destination level would conflate heterogeneous origin-specific effects and may introduce dynamic endogeneity. We therefore do not include such proxies and instead discuss this limitation explicitly (Table 1).
TABLE 1
DESCRIPTIVE STATISTICS FOR THE DATA USED
| Variable | Mean | Std. Dev. | Min | Max |
|---|---|---|---|---|
| Migration inflows (Total) | 4353.69 | 41301.95 | 0 | 2644770 |
| Migration inflows (Male ) | 2381.18 | 24541.02 | 0 | 1213498 |
| Migration inflows (Female) | 1870.50 | 18527.34 | 0 | 724096 |
| NYC ratification | 0.43 | 0.49 | 0 | 1 |
| GDP per capita | 7197.18 | 12217.66 | 7.12 | 113738.72 |
| GATT/WTO member | 0.66 | 0.47 | 0 | 1 |
| EU member | 0.11 | 0.31 | 0 | 1 |
| Less developed country | 0.59 | 0.49 | 0 | 1 |
SOURCE: Own elaboration.
4. Empirical results[Up]
The results reported in Table 2 show that NYC ratification is strongly and positively associated with migration inflows across all specifications. In column (1), the coefficient of 0.501 implies that NYC adoption is associated with roughly a 65% increase in total migration inflows. When disaggregated by gender, the association remains positive for both men and women, but the effect is stronger for women. The coefficient of 0.450 for male inflows corresponds to about a 57% increase, while the coefficient of 0.566 for female inflows corresponds to a 76% increase. These results reinforce the conclusion that NYC adoption is associated with substantial increases in migration flows, with particularly pronounced effects for female migrants.
TABLE 2
EFFECT OF THE NEW YORK CONVENTION ON MIGRATION INFLOWS (Baseline PPML estimates)
| (1) Total |
(2) Male |
(3) Female |
|
|---|---|---|---|
| NYC | 0.501[***] | 0.450[***] | 0.566[***] |
| (0.0266) | (0.0408) | (0.0307) | |
| GDPCAP | -0.00001[***] | -0.00001[***] | -0.00001[***] |
| (0.0000) | (0.0000) | (0.0000) | |
| GATT | 0.556[***] | 0.603[***] | 0.501[***] |
| (0.0317) | (0.0471) | (0.0411) | |
| EU | 0.789[***] | 0.907[***] | 0.641[***] |
| (0.0341) | (0.0520) | (0.0392) | |
| N | 340497 | 171245 | 169252 |
NOTES: Unit of observation: destination–year. Migration inflows are aggregated across all origin countries. The sample is restricted to destination–years reporting both male and female inflows; total inflows equal the sum of male and female inflows. Region-level observations are excluded. Robust standard errors in parentheses, clustered by country.
Year dummies included.
[*] p < 0.05, [**] p < 0.01, [***] p < 0.001.SOURCE: Own elaboration.
Turning to the control variables, gdpcap enters with a small but consistently negative and statistically significant coefficient in all columns, suggesting that higher destination-country income per capita is associated with slightly lower bilateral migration inflows. Both GATT and EU exhibit strong, positive, and highly significant associations with migration. GATT/WTO membership is linked to higher inflows of total, male, and female migrants, while EU membership shows an even stronger positive relationship, especially for male inflows. Overall, the results indicate that institutional openness—through the NYC, GATT/WTO, and EU membership—is strongly associated with higher migration inflows, with the largest relative gains observed for female migrants.
The larger effect on female migration may reflect gender differences in the motivations and channels of migration during the period analyzed. Historically, fewer women migrated primarily for employment. As Zlotnik (1995) observes, the “majority of women who migrate internationally do not do so for work purposes,” but rather through family reunification programs or other family-related channels—a pattern also emphasized by Docquier et al. (2012). These migration pathways are less directly tied to labor-market conditions and may respond differently to institutional improvements. At the same time, economic factors have become increasingly important for female migrants over time, with rising female participation in global labor markets and growing demand for women’s labor in services and care-intensive sectors (International Labour Organization Statistics [ILOSTAT], 2020). This combination of historically lower labor-driven migration and more recent increases in women’s economic migration may help explain why improved contract enforcement—by stimulating trade, FDI, and employment opportunities—has a particularly strong association with female inflows in our results.
Table 3 shows the results when an interaction is included for low-income countries. The results reveal substantial heterogeneity in the association between NYC ratification and migration inflows depending on a country’s level of development. For developed countries (the reference group), the main NYC coefficient is positive and significant across all migration outcomes. The estimated effects imply that NYC adoption is associated with increases of approximately 24% in total inflows [exp(0.216)–1 ≈ 0.241], 19% in male inflows [exp(0.178)–1 ≈ 0.195], and 31% in female inflows [exp(0.268)–1 ≈ 0.307]. These results indicate that even among developed economies, improved cross-border contract enforcement is linked to sizeable increases in migration, with especially strong effects for women.
TABLE 3
EFFECT OF THE NYC BY DEVELOPMENT STATUS
| (1) Total |
(2) Male |
(3) Female |
|
|---|---|---|---|
| NYC_j | 0.216[***] | 0.178[**] | 0.268[***] |
| (0.0436) | (0.0645) | (0.0505) | |
| LessDeveloped | -0.959[***] | -0.988[***] | -0.925[***] |
| (0.0566) | (0.0822) | (0.0722) | |
| NYC_j × LessDeveloped | 0.324[***] | 0.312[***] | 0.331[***] |
| (0.0609) | (0.0910) | (0.0734) | |
| GDPCAP | -0.00002[***] | -0.00002[***] | -0.00002[***] |
| (0.0000) | (0.0000) | (0.0000) | |
| GATT | 0.485[***] | 0.522[***] | 0.441[***] |
| (0.0296) | (0.0437) | (0.0387) | |
| EU | 0.484[***] | 0.583[***] | 0.356[***] |
| (0.0349) | (0.0527) | (0.0399) | |
| N | 340497 | 171245 | 169252 |
NOTES: Unit of observation: destination–year. Migration inflows are aggregated across all origin countries. The sample is restricted to destination–years reporting both male and female inflows; total inflows equal the sum of male and female inflows. Region-level observations are excluded. Robust standard errors in parentheses, clustered by country.
Year dummies included.
[*] p < 0.05, [**] p < 0.01, [***] p < 0.001.SOURCE: Own elaboration.
The coefficient on LessDeveloped is large and negative in all specifications, reflecting substantially lower baseline migration inflows in developing countries relative to developed ones. The magnitude corresponds to reductions of roughly 62% to 63% in expected inflows, depending on the gender group [exp(–0.925 to –0.988)–1].
The interaction term NYC × LessDeveloped is positive and significant across all columns, indicating that the effect of NYC adoption is significantly stronger in developing countries than in developed countries. The interaction coefficients translate into additional increases of roughly 38% for total inflows [exp(0.324)–1 ≈ 0.382], 37% for male inflows [exp(0.312)–1 ≈ 0.366], and 39% for female inflows [exp(0.331)–1 ≈ 0.393]. Combining main and interaction terms, the total effect of NYC adoption in developing countries becomes large: approximately 74% for total inflows, ~63% for male inflows, and ~85% for female inflows. Overall, these results indicate that NYC adoption is associated with increases in migration flows everywhere, but the effects are substantially stronger in developing countries, especially for female migration.
This pattern is consistent with the idea that institutional improvements such as NYC adoption generate larger marginal gains in less developed countries, where baseline contract-enforcement institutions are weaker and where firms and migrants face higher transaction costs (Cooray & Schneider, 2016). It also aligns with evidence that many developing economies are diversifying away from primary commodities toward more complex and contract-intensive goods and services. As Dollar and Kidder (2017) note, these sectors benefit disproportionately from stronger contract enforcement, unlike traditional commodity trade, which is relatively insensitive to such institutional quality. Consequently, improvements in contract enforcement are more likely to stimulate economic activity—and therefore migration inflows—in less developed countries than in developed ones.
The heterogeneity we observe across both gender and levels of development is also consistent with recent evidence from Carril-Caccia et al. (2024), who show that countries with higher levels of gender discrimination—typically developing economies—exhibit larger elasticities of substitution between male and female labor. In such contexts, women can more readily substitute for men in production, meaning that increases in labor demand generated by improvements in contract enforcement, trade, or FDI are more easily absorbed through female employment. This greater substitutability amplifies the responsiveness of female migration to institutional improvements. By contrast, in more developed countries, where labor markets are more segmented by occupation and discrimination levels are lower, substitution between male and female labor is more limited, leading to smaller migration responses—particularly for men. These structural labor-market differences help explain why NYC adoption has especially strong effects on female migration and why the increases in migration associated with improved contract enforcement are systematically larger in developing countries.
5. Conclusions[Up]
This study provides new evidence that cross-border contracting institutions shape international migration patterns. Using migration flows and variation in countries’ ratification of the New York Convention (NYC), we find that improved international contract enforcement is associated significantly with migration inflows.
Our results reveal substantial heterogeneity across gender and levels of development. NYC ratification is associated with significant increases in migration inflows for both men and women, but the magnitude of these effects differs markedly. In developed countries, NYC adoption raises migration inflows modestly—more strongly for women than for men—while in developing countries the effects are considerably larger for both genders. The interaction estimates show that developing countries experience substantially greater increases in total, male, and especially female inflows following NYC ratification. These patterns indicate that the migration response to improved cross-border contract enforcement is far from uniform: instead, it varies systematically with countries’ development levels and migrant characteristics.
Several mechanisms may explain these heterogeneous effects. First, men and women tend to sort into different sectors, with male migrants more concentrated in contract-intensive industries such as manufacturing, construction, and tradable services, and women more represented in domestic, care, and service occupations. Stronger enforcement through the NYC may therefore generate broader labor-demand effects in developing countries, where institutional reforms represent larger marginal improvements and where these sectors rely more heavily on foreign labor. Second, the benefits of enhanced contract enforcement depend on a country’s production and export structure. Consistent with Berkowitz et al. (2006), countries specializing in more complex or contract-intensive goods gain disproportionately from improved enforcement, potentially amplifying the labor-demand response and thus the migration effects—particularly in developing economies undergoing structural transformation. Third, NYC adoption has been shown to have larger impacts on trade and FDI in developing countries, where institutional gaps are greater; these increases in international economic activity may translate into higher demand for both male and female migrant workers. Finally, developing countries often exhibit higher elasticities of substitution between male and female labor, meaning that shifts in labor demand induced by improved contract enforcementmay generate larger adjustments in migration flows—especially for women, whose labor tends to be more easily reallocated within expanding sectors.
Overall, the findings highlight that institutions facilitating cross-border contracts, long recognized as central to trade and investment, also influence global migration flows. Strengthening contracting institutions may therefore serve as an indirect mechanism through which countries can expand economic opportunities associated with migration inflows.
A limitation of our analysis is that it relies on destination–year migration inflows aggregated across origins rather than fully dyadic origin–destination data. While this approach is well suited to studying aggregate labor-demand responses to institutional change, it precludes the inclusion of bilateral migrant-network measures and origin-specific controls that are central in dyadic migration models. In addition, although our analysis exploits cross-country variation in the timing of NYC ratification, most identifying variation occurs at the country level rather than within countries. Consequently, our estimates should be interpreted as correlational and may partly capture broader institutional changes accompanying NYC adoption, rather than isolating the causal effect of arbitration enforcement alone. Future research using fully dyadic migration data and richer time-varying institutional measures could further disentangle these channels and examine how contract-enforcement institutions interact with migrant networks over specific country pairs.