Arbeitspapier

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 pay back the debt. These debt/labor contracts are more easily enforceable 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 increase rather than decrease the ex ante flow of illegal migrants. We also show that stricter deportation policies worsen the skill composition of immigrants. While stricter border controls decrease overall immigration, they may also result in an increase of debt-financed migration.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 1025

Klassifikation
Wirtschaft
Economic History: Financial Markets and Institutions: U.S.; Canada: Pre-1913
Geographic Labor Mobility; Immigrant Workers
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Thema
illegal migration
wealth constraints
indentured servitude
financial contracting
Illegale Einwanderung
Private Verschuldung
Verschuldungsrestriktion
Arbeitsvertrag
Migrationspolitik
Theorie

Ereignis
Geistige Schöpfung
(wer)
Friebel, Guido
Guriev, Sergei
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2004

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Friebel, Guido
  • Guriev, Sergei
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2004

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