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The Market for Mules: Risk and Compensation of Cross-Border Drug Couriers

Author

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  • Bjerk, David J.

    (Claremont McKenna College)

  • Mason, Caleb

    (Miller Barondess, LLP)

Abstract

This paper uses a unique dataset to examine the economics of cross-border drug smuggling. Our results reveal that loads are generally quite large (median 30 kg), but with substantial variance within and across drug types. Males and females, as well as U.S. citizens and non-U.S. citizens are all well represented among mules. We also find that mule compensation is substantial (median $1,313), and varies with load characteristics. Specifically, for mules caught with cocaine and meth, pay appears to be strongly correlated to expected sentence if caught, while pay appears to be primarily correlated with load size for marijuana mules, who generally smuggle much larger loads than those smuggling cocaine and meth. We argue that our results suggest that this underground labor market generally acts like a competitive labor market, where a risk-sensitive, reasonably well-informed, and relatively elastic labor force is compensated for higher risk tasks.

Suggested Citation

  • Bjerk, David J. & Mason, Caleb, 2014. "The Market for Mules: Risk and Compensation of Cross-Border Drug Couriers," IZA Discussion Papers 8224, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8224
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    References listed on IDEAS

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    1. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 755-789.
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    5. Paul Gertler & Manisha Shah & Stefano M. Bertozzi, 2005. "Risky Business: The Market for Unprotected Commercial Sex," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 518-550, June.
    6. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-895, October.
    7. O'Neill, June & Polachek, Solomon, 1993. "Why the Gender Gap in Wages Narrowed in the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 205-228, January.
    8. Caulkins, Jonathan P. & Reuter, Peter, 2006. "Illicit drug markets and economic irregularities," Socio-Economic Planning Sciences, Elsevier, vol. 40(1), pages 1-14, March.
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    Cited by:

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    2. Arye L. Hillman & Ngo Long, 2022. "Immigrants as future voters," Public Choice, Springer, vol. 190(1), pages 149-174, January.

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    More about this item

    Keywords

    drug smuggling; compensating wage differentials; illegal markets; sentencing;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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