Determinants of Trafficking in Women and Children: Cross-National Evidence, Theory and Policy Implications

This paper explores empirically and theoretically one of the least studied economic phenomenon: the trafficking of women and children into slavery. By focusing on market imperfections and differential bargaining power amongst the concerned parties, we pin down how the incentives of traffickers (middlemen) are affected in response to interventions that grant legal status to trafficked persons in host countries and tougher legislation targeting traffickers in the source countries. Using cross-national data, we find that (i) a typical worker in a source country of international trafficking and trafficking hubs are more likely to be employed in agriculture, (ii) a higher dependency ratio due primarily to the larger size of children population in source countries and trafficking hubs compared to host countries, (iii) higher incidence of child labor in source countries and trafficking hubs and (iv) host countries have, on average, the highest police force per capita compared to source countries and trafficking hubs. Nevertheless, the number of convicted persons per recorded crime is also the lowest there. Finally, the granting legal status to trafficked victims in host countries, as well as a legal ban on prostitution in source countries, are both associated with an increased likelihood of trafficking.