Smuggling Humans: A Theory of Debt-financed Migration
We introduce financial constraints in a theoretical analysis of illegal immigration. Intermediaries finance the migration costs of wealth-constrained migrants, who enter temporary servitude contracts to repay the debt. These debt/labor contracts are easier to enforce in the illegal than in the legal sector of the host country. Hence, when moving from the illegal to the legal sector becomes more costly-for instance, because of stricter deportation policies-fewer immigrants default on debt. This reduces the risks for intermediaries, who are then more willing to finance illegal migration. Stricter deportation policies may thus, ex ante, increase rather than decrease the flow of illegal migrants. Furthermore, stricter deportation policies worsen the skill composition of immigrants. While stricter border controls decrease overall immigration, they may result in an increase of debt-financed migration. We also show that there are complementarities between employer sanctions and deportation policies. We use available evidence to check the empirical consistency of the theory. (JEL: J61, K42, O17) (c) 2006 by the European Economic Association.
Volume (Year): 4 (2006)
Issue (Month): 6 (December)
|Contact details of provider:|| Web page: http://www.mitpressjournals.org/jeea|
|Order Information:||Web: http://www.mitpressjournals.org/jeea|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Slobodan Djajic, 1999. "Dynamics of immigration control," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 45-61.
- Tirole, Jean, 2001.
Econometric Society, vol. 69(1), pages 1-35, January.
- Guillermina Jasso & Douglas S. Massey & Mark R. Rosenzweig & James P. Smith, 2004.
"The New Immigrant Survey Pilot (NIS-P): Overview and New Findings about U.S. Legal Immigrants at Admission,"
Labor and Demography
- Guillermina Jasso & Douglas Massey & Mark Rosenzweig & James Smith, 2000. "The new immigrant survey pilot (NIS-P): Overview and new findings about U.S. Legal immigrants at admission," Demography, Springer;Population Association of America (PAA), vol. 37(1), pages 127-138, February.
- Katharine Donato & Jorge Durand & Douglas Massey, 1992. "Stemming the tide? Assessing the deterrent effects of the immigration reform and control act," Demography, Springer;Population Association of America (PAA), vol. 29(2), pages 139-157, May.
- W. Kip Viscusi & Joseph E. Aldy, 2003.
"The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World,"
NBER Working Papers
9487, National Bureau of Economic Research, Inc.
- Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
- Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 2002.
"Does Border Enforcement Protect U.S. Workers From Illegal Immigration?,"
The Review of Economics and Statistics,
MIT Press, vol. 84(1), pages 73-92, February.
- Hanson, G.H. & Robertson, R. & Spilimbergo, A., 1999. "Does Border Enforcement Protect U.S. Workers from Illegal Immigration?," Working Papers 438, Research Seminar in International Economics, University of Michigan.
- Gordon H. Hanson & Raymond Robertson & Antonio Spilimbergo, 1999. "Does Border Enforcement Protect U.S. Workers from Illegal Immigration?," NBER Working Papers 7054, National Bureau of Economic Research, Inc.
- Piketty, Thomas, 2000. "Theories of persistent inequality and intergenerational mobility," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 8, pages 429-476 Elsevier.
- Gil S. Epstien & Avi Weiss, 2001.
"A Theory of Immigration Amnesties,"
2001-09, Bar-Ilan University, Department of Economics.
- Sherrie A. Kossoudji & Deborah A. Cobb-Clark, 2002.
"Coming out of the Shadows: Learning about Legal Status and Wages from the Legalized Population,"
Journal of Labor Economics,
University of Chicago Press, vol. 20(3), pages 598-628, July.
- Kossoudji, S.A. & Cobb-Clark, D.A., 1996. "Coming Out of the Shadows: Learning About Legal Status and Wages from the Legalized Population," CEPR Discussion Papers 347, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Avi Weiss & Arye L. Hillman & Gil S. Epstein, 1999.
"Creating illegal immigrants,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 12(1), pages 3-21.
- Chiswick, Barry R. & Hatton, Timothy J., 2002.
"International Migration and the Integration of Labor Markets,"
IZA Discussion Papers
559, Institute for the Study of Labor (IZA).
- Barry Chiswick & Timothy J. Hatton, 2003. "International Migration and the Integration of Labor Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 65-120 National Bureau of Economic Research, Inc.
- Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
- Galenson, David W., 1984. "The Rise and Fall of Indentured Servitude in the Americas: An Economic Analysis," The Journal of Economic History, Cambridge University Press, vol. 44(01), pages 1-26, March.
- Francisco L. Rivera-Batiz, 1999. "Undocumented workers in the labor market: An analysis of the earnings of legal and illegal Mexican immigrants in the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(1), pages 91-116.
- Genicot, Garance, 2002. "Bonded labor and serfdom: a paradox of voluntary choice," Journal of Development Economics, Elsevier, vol. 67(1), pages 101-127, February.
- repec:reg:rpubli:282 is not listed on IDEAS
- Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592.
- Chau, Nancy H, 2001. "Strategic Amnesty and Credible Immigration Reform," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 604-34, July.
When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:4:y:2006:i:6:p:1085-1111. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites)
If references are entirely missing, you can add them using this form.