draining development.pdf - Khazar University

Human Trafficking and International Financial Flows 183Thus, the supply and demand must be located differently accordingto whether the decision to cross the border is free or forced. Most often,the smugglers vaunt the benefits they offer. Often exaggerated andromanticized, the descriptions of the benefits are tailored to the expectationsor desires of the prospective immigrants.The economy of illegal immigration is based on the existence of twodifferentials (Cornelius et al. 2010). The first differential separates thewage levels in the source country and the host country. The second distinguishesthe standards of living in the two countries.First, the illegal immigrant provides manpower at a price that is lowerthan the price on the market in the host country or fills a gap in manpowerof a particular type. This differential persists over time if antiimmigrationregulations are sufficiently strict to remain a threat to theillegal immigrant. In the absence of legal barriers to entering the employmentmarket, the wages of the illegal immigrant will tend to becomealigned with the wages of the local employee. Recourse to illegal manpoweris also a means of exerting pressure on local employees. Historically,illegal manpower is less unionized than the legal workforce, andcontractors have often used the supply of illegal immigrants to forcedown the average union wage rate.The second differential concerns the living conditions of illegal immigrantsand of the local workforce. The fact that the illegal immigrantsaccept less than average wages normally means that they also live inmore straitened circumstances. As long as the illegal immigrants acceptor must accept such a differential, the initial characteristics remain intact(the lower wage rate). Over time and in some countries (the UnitedStates, but not Saudi Arabia, for example), the illegal immigrants willescape at least some of the initial conditions and will gain professionalqualifications and bargaining power that will enable them to gain accessto better employment status than they had on arrival.The more transient the entry barriers, the more illegal immigrantscan hope to melt into the legal workforce and make the individual trajectoryof their jobs converge with that of the average employee in thecountry.Occasionally, an individual may escape the initial conditions relativelyquickly. Marriage remains an important possibility. Thus, a demographicgender imbalance can create a greater demand for one gender