Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/99044 
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers No. 8224
Publisher: 
Institute for the Study of Labor (IZA), Bonn
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.
Subjects: 
illegal markets
compensating wage differentials
drug smuggling
sentencing
JEL: 
K42
Document Type: 
Working Paper

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