Skip to Main content Skip to Navigation
Journal articles

Smuggling humans: A theory of debt-financed migration

Abstract : 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.
Document type :
Journal articles
Complete list of metadata
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, November 30, 2021 - 11:50:56 PM
Last modification on : Friday, March 25, 2022 - 3:30:47 AM


Files produced by the author(s)




Guido Friebel, Sergei Guriev. Smuggling humans: A theory of debt-financed migration. Journal of the European Economic Association, Wiley, 2006, 4 (6), pp.1085 - 1111. ⟨10.1162/JEEA.2006.4.6.1085⟩. ⟨hal-03459245⟩



Record views


Files downloads