July, 2015


The Industrial Organization of Human Smuggling
  • Zachary Gochenour

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Human smuggling is a criminal enterprise where immigrants pay smugglers to help them cross borders and forge immigration documents. Over the past few decades, this enterprise has become dominated by large criminal organizations, who have displaced independent smugglers. I argue that changes in U.S. immigration enforcement policy is responsible for the change in market structure. As in any market, changes in costs can affect how producers organize. Under strict border enforcement, large criminal firms have a comparative advantage over small firms. Since 2001, U.S. border patrol agents have doubled, increasing the cost of border crossing and attracting organized criminal involvement. I compare this situation to the market for human smuggling in the 1980s and to legitimate firms engaged in similar business in the pre-restriction era.

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