A Model of Smuggling and Trafficking of Illegal Immigrants with a Host Country Policy

• DOI: http://doi.org/10.1111/rode.12307
• Date: 01 August 2017
• Published date: 01 August 2017

A Model of Smuggling and Trafficking of Illegal

Immigrants with a Host Country Policy

Saibal Kar and Hamid Beladi*

Abstract

This paper deals with illegal immigration via two distinct activities—smuggling and trafficking of workers.

A destination–source model determines economic pay-offs and a standard labor market policy works as a

deterrent. Tax paid by legal unskilled workers at the destination is determined endogenously and it

finances inland monitoring against illegal immigration, holding the border patrol at a given level. The tax

also finances unemployment benefit to legal workers at the destination. The number of immigrant

smugglers and traffickers is also determined endogenously along with employer penalty and market wage

for illegal immigrants. Higher unemployment benefits may reduce illegal wages, raise traffickers’ rent and

reduce flow of illegal immigrants from the source countries.

Epigraph

Sonia was invited to come to the United States by family friends and told that she could

work for them as a housekeeper, and they would pay her $100.00 a week. Sonia was

provided with fraudulent documents and departed for the United States with her new

employer. She knew that this was illegal, but she needed the money and was willing to

take the risk. Was Sonia smuggled or trafficked? Sonia was smuggled into the United

States. She left willingly with full knowledge that she was entering the United States

illegally.

Upon arriving in the Un ited States, Sonia was kept in isolation, sh e was given a

place to sleep in the bas ement and told not to speak to anyone or she woul d be

turned over to the Immig ration Service. Soni a was never paid for her wor k and felt

that she had no one to turn to for he lp. Was Sonia smuggled or trafficked? At this

point Sonia was restricted from leaving the house, threatened with deportation if she

attempted to talk to an yone and forced into in voluntary servitud e. Sonia is a victim

of trafficking.

[Excerpts from Fact Sheet, The Human Smuggling and Trafficking Center at the

US Department of State , Washington DC, Janu ary 1, 2005 (italics adde d)]

*Beladi (Corresponding author): Department of Economics, University of Texas at San Antonio, San

Antonio, TX, 78231, USA. E-mail: hamid.beladi@utsa.edu. Kar: Department of Economics, Calcutta

University, Kolkata, West Bengal, 700050, India. Also affiliated to IZA, Bonn, Germany. Kar thanks

Alexander von Humboldt Foundation and the ICSSR-NWO for partial financial support. The comments

from an anonymous reviewer and the Editor are gratefully acknowledged. Visit to Amsterdam School of

Economics, and comments from Subhayu Bandopadhyay, Arnab Basu, Nancy Chau, Guido Friebel,

Thomas Straubhaar have duly improved the paper. The usual disclaimer applies. Beladi acknowledges

support from the Briscoe endowment.

Review of Development Economics, 21(3), 698–712, 2017

DOI:10.1111/rode.12307

©2017 John Wiley & Sons Ltd