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How does labor emigration affect state-society relations across postcolonial states of the Global South? We argue that the opportunity to pursue employment abroad alters a fundamental part of postcolonial states – the post-independence social contract. The inability of states in the Global South to sustain post-independence levels of welfare provisions led, firstly, to the development of emigration management institutions that sought to encourage and regulate citizens’ labor emigration, and secondly, the widening of a remittance–welfare gap, when labor emigration and remittances outpace state-sponsored welfare provision. These mark the emergence of a transnational social contract, where citizens’ access to employment abroad is leveraged by states in exchange for political acquiescence. Sending states ‘transnationalize’ the obligations of a domestic social contract when labor mobility substitutes for weak state welfare. The transnational social contract framework reveals the emergence of de jure and de facto forms of transnational coercion by sending states towards migrant labor. We test this argument across two postcolonial states in South Asia and the Middle East: Nepal and Jordan. We offer an interregional analysis that acts as a corrective to the dominance of South-North migration research and provide a novel framework on the impact of migration upon non-Western states.