Trafficking in Human Beings: an empirical investigation for Europe.

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University of Pisa

Master of Science in Economics

Trafficking in Human Beings: an empirical

investigation for Europe

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List of Figures

2.1 Trends in the shares of female and male victims in the EU-28 2010-2012.

Source: EUROSTAT . . . 27

2.2 Trends in the shares of men among detected trafficking victims, 2006-2016.

Source: IOM . . . 28

2.3 Main destinations of transregional flows and their significant origins,

2012-2014. Source: UNODC . . . 30

4.1 Short-run supply of a trafficker in a monopolistically competitive market . 44

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List of Tables

5.1 Basic linear model with fixed effects, 2008-2014 . . . 64

5.2 Estimation with fixed effects, 2008-2014 . . . 65

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1 Introduction

Borrowing both from cross-sectional and panel data analysis, we propose a longitudinal study on the determinants of human trafficking in the EU-28, Switzerland and Norway, following the lines of research of Akee et al. (2010) and Rudolph and Fernandez (2015). The phenomenon of human trafficking has begun to be investigated only recently by scholars, although the international recognition of its importance has started at the beginning of the ’90s. Some of the reasons that have caused such a delay are to be found in the scarcity of data and in the lack, for a long time, of a common international (applied) definition (Lazcko, 2003). Nevertheless, the studying of trafficking in human beings is particularly interesting from an economic point of view, since it involves the analysis of the causes and the consequences of migrations and its bad management, the problematic condition of low-skilled jobs in modern economies and the importance of fundamental rights, not only for the respect of human dignity but also to be able to act, in a certain sense, as a ‘’Homo Economicus” (Shelley, 2010). Trafficked victims are, in fact, excluded from the society and deprived of their freedom to choice.

The proposed analysis of our work lies in an empirical investigation of the phe-nomenon of trafficking in human beings in Europe. As a matter of fact, practically all the European countries are affected by this phenomenon either as destination, transit or origin countries. However, there is still large uncertainty in understanding the reason why so many European countries register high number of victims. Through a broad re-view of the theoretical and empirical literature on the subject, we select three important pillars that could explain the differences among European countries, namely migration, institutions, and culture and social norms of countries (Akee et alii (2014); Cho (2015a, 2015b, 2015c); Rudoplh and Fernandez (2015): Rudolph and Scheider (2017)). In order

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to conduct such an analysis, panel yearly data were employed with a time span of nine years, from 2008 and 2016.

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2 A general overview of Human Trafficking

The exploitation of men, women and children is a global contemporary phenomenon that involves both the developing and the developed countries, creating a highly distortive outcome in terms of fair competition and for the efficient functioning of the economic sectors in which is present.

One of the most important manifestation of such exploitative behaviours is trafficking in human beings, a phenomenon that is generally included in the broad category of

“Modern day slavery”1_{. Although it is unevenly distributed between the centres and}

the peripheries of the world economy, human trafficking affects practically all countries and constitutes an aggressive system of control, of abusively taking advantage of and of exercising power over people (Santos et al, 2014). ILO global estimates of Modern slavery of 2016 underlined that at any point in time there were 40, 3 million of people victims of modern slavery. Within this total, 24, 9 millions were victims of forced labor and sexual exploitation, two categories that are part of human trafficking, and an aver-age of 3, 9 victims per 1000 inhabitants were founded in Europe and Central Asia (ILO, 2017).

In this thesis, the analysis will be focused on trafficking in human beings, trying to

fur-nish a tentative analysis of the factors that determine its presence in Europe2.

Economic motivation explains the phenomenon of human trafficking to a great extent, given that most victims of human trafficking are initially migrants with economic rea-sons (International Organization for Migration [IOM], 2012). Generally, these

motiva-1_{modern slavery covers a set of specific legal concepts including forced labour, debt bondage, forced}

marriage, slavery and slavery-like practices, and human trafficking.

2_{With this term we refer to the general geographical area of investigation which entails the EU-28}

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tions have been mainly driven by large income disparities between richer and relatively poorer countries. For the case of Europe, this has meant consistent flows of victims between the former member of the European Union and the “newly” joined Eastern eu-ropean countries and the additional effect of the more recent established migratory roots mainly from the African continent and the Middle East. Henceforth, the risk of being trafficked has increased especially between migrants, though it is difficult to construct a quantitative knowledge of its scope.

The international community has engaged in the contrast to this illegal activity since the 2000, promoting the adoption of several protocols that are underpinned by two impor-tant basic aims: the prevention and prosecution of this insurgent form of modern slavery and the essential need of common frameworks and practices to measure trafficking in human beings.

For what concern the first objective, in a report of 2008, UNODC sustained that the traditional approaches to preventing trafficking in human beings and to protect and assist victims have had just a small effect on the global phenomenon. Unfortunately, such a picture seems still to be the reality; especially for the european union. Between 2015-2016, 7503 people were in formal contact with member states police and or criminal justice systems, wither being suspected, arrested or cautioned for offences in trafficking in human beings (EUROSTAT, 2018). However, looking at the figures on final decision of prosecutions, only around one thousands are for human trafficking. Therefore, im-punity is likely still an issue in this area.

For what concern the statistical procedures, twenty years after the first importnat UN

protocol3_{, the international community still lacks the desired instruments to measure}

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the correct magnitude of the phenomenon. Indeed, although many countries have rat-ified this protocol, its application remains uncertain and arguably fragmented between member states.

The case of Europe is illustrative of the situation. In a review of the nature of the existing databases on detected victims of human trafficking in EU, Van Dijik et al (2014) have ex-pressed their concern for the highly divergent collection of data on trafficking in persons between EU members. This lack of harmonization is a serious concern if one considers that the European Union has a particular advanced legislation on human trafficking and several provisions for common procedures for data collection (see for example EU Di-rective, EU Strategy towards the Eradication of Trafficking in Human Beings 2012-2016.)

Although the situation described above promotes intrinsic methodological problems for research, the evidences collected so far underline the importance, both intellectual and ethical, of deepening the knowledge of this phenomenon and those interrelated to it. In addition to this, there are interesting theoretical and empirical studies on the link between migration, human trafficking and forced labor that deserve a further investi-gation (UNODC, 2016). Indeed, phenomena as human trafficking or human smuggling frequently have flourished in the same routes used by irregular migrants and it suffices to recall that in 2015 around 1 million of people have crossed illegally the EU borders (Frontex, 2018).

Given the theoretical challenge in disentangling the elements that determines modern slavery and, more specifically human trafficking, this section will clarify from a qualita-tive point view the definition of human trafficking. It will be assessed its legal definition and its difference with human smuggling and irregular migration. Moreover, interesting and updated figures will be presented so to have a general idea of the main features of

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2.1 Human trafficking: defining a complex phenomenon

In the last few decades, human trafficking has become a growing phenomenon worldwide. The illicit trade in human beings across borders violates the human rights of victims, threatens national security and deteriorates the health of the affected economies and societies by increasing the size of the shadow economy and organized criminal activi-ties (Belser 2005) as well as altering competition and profitability of businesses. ILO (2017) reported that this phenomenon regards especially the private economy, being most present in traditional low-skilled sectors as construction, agriculture and domestic work. In addition to this, the large majority of identified victims in Europe are found to be exploited in sex works. Nevertheless, this result has to be carefully interpreted being mainly driven by an overrepresentation of women in the sample of the detected victims.

Although the exact magnitudes and dimensions of the problem are unknown, avail-able statistics suggest that human trafficking is one of the most serious transnational crimes in the 21st century, just after drug and arms trafficking.

Despite the general concern for the existence of a quasi-systematic condition of exploita-tion of specific vulnerable groups, even within more advanced countries, the establish-ment of a wide international definition of human trafficking has been a long and tough process. The debate between trafficking, human smuggling and organized crime, has started in the half of 1990s when governmental institution, academia and non govern-mental institution were using different terminology and concepts ( Salt, 2000). This difficulty has caused serious limitations in the research field since the lack of an agreed and widely applied definition has hampered the analysis of the phenomenon in all its as-pects. For what concerns statistical analysis, for example, the main effect has been that

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data collection process used to vary systematically across european countries leading nei-ther to have comparable data neinei-ther to produce correct estimates on its incidence(Peter G. M. van der Heijden and Jan van Dijk, 2016). It was only with the adoption of the Palermo Protocol in 2000 that a clearer definition was imposed and issues of compara-bility became less severe.

The Palermo protocol, or more formally the Protocol to Prevent, Suppress and Punish

Trafficking in Persons, especially Women and Children4 _{(the so calledPalermo}

Proto-col ),was created as a supplement of the United Nations Convention against

Transna-tional Organized crime5_{. It has been regarded as the first successful international}

agree-ment on the common eleagree-ments and implications of human trafficking and it has been followed by subsequent international and national legislation (Shelley, 2008). This is for example the case of the EU where in 2002 the EU commission adopted the Framework Decision on Combating Trafficking in Human Beings and in 2005 the Council of Europe adopted the Convention on Action against Trafficking in Human Beings.

Looking more closely at the text of the protocol, article 3 defines human trafficking as: “the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments and benefits to achieve the consent of a person, having control over another person, for the purpose of exploitation”.

4_{available at: https://www.ohchr.org/en/professionalinterest/pages/protocoltraffickinginpersons.aspx.} 5_{available at: https://www.unodc.org/unodc/en/organized-crime/intro/UNTOC.html.}

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The juridical interpretation6_{of article 3 agrees in identifying three core components}

within the definition of trafficking in human being that could be summarized in:

• the presence of deception or coercion,

• the movement or harboring of an individual,

• the placement of the said individual in exploitative situations.

Said in other words, the trafficked victims are abused through exploitation and coercion and deprived of the freedom to move or choose their place of living (Gallagher, 2009). In practice, often the exploitation substantiates in forced labor or sexual exploitation and the same protocol forsees these cases: “exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labor or services, slavery or practices similar to slavery, servitude or organ removal ”. On the one hand, some scholars, for example Salt (2000), underlines that main purpose of trafficking is exactly to place persons in situations where their labor can be exploited under the conditions characterized by human right abuses. On the other hand, Lazcko

(2003) focuse more on the the presence of deception and movement7_.

Given this definition it is also interesting to understand more practically under which circumstances human trafficking could substantiate. Rudolph et al (2015) suggested three scenarios in which victims might end up in the hand of the traffickers. For ex-ample, an individual wanting to migrate might contact a smuggler in order to enter the destination country illegally and eventually ends up being trafficked. Having an out-standing debt with the smuggler sharply increases the chances of being trafficked (Friebel

6_{See for example Shelley (2008).}

7_{This interpretation is a perfect example of the fundamental methodological debate over the definition}

of human trafficking which was particularly lively back in 2000. See for example Graycar(1999) and Meese et al.

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and Guriev, 2006). In the second scenario, individuals are deceived by a job offer abroad which seemed legitimate, however their documents are expropriated upon their arrival. This means they, too, end up being trafficked. During the hiring process, traffickers might collect information on the individuals relatives and friends to manipulate their victims and facilitate exploitation. The final scenario is one in which individuals are kidnapped in their home country and transported against their will to a different place, where they are subsequently exploited. This last case is less frequent, though.

Nevertheless, the provision of an universal definition of human trafficking is not the only function of the Palermo Protocol. As a matter of fact, the Anti-trafficking Protocol is a human rights treaty calling for a concerted effort against human trafficking and for the protection of victims. Specifically, it regulates the obligations that member states must take so to contrast human trafficking, namely: preventing the crime of human traf-ficking; protecting victims; and prosecuting traffickers (the so-called 3Ps). However, like other human rights treaties, the Anti-trafficking Protocol lacks an enforcement mecha-nism. Despite being regulated, the translation of the Protocol into domestic legislation and enforcement upon ratification is not forced to members, thus being subject to the individual decisions of member states. This means that there is no official cost imposed on member states for not fulfilling obligations prescribed by the Protocol.That being said, the Anti-trafficking Protocol has a distinctive difference from other human rights treaties. As it is a treaty addressing a transnational crime, compliance with the Proto-col in a country creates transnational consequences, with anti-trafficking policy in one country affecting trafficking flows into another country. Such interesting cross-country spatial feature has been tested by Choet al (2012). They employed an autoregressive spatial model and founded the presence and the importance of these spillover effects across countries. This in part the specific reason for which the EU commision decided to

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created a dedicated organism, the EU Anti-Trafficking coordinator, which has the spe-cific objectives to foster the coordination among member states policies against human

trafficking8_{. Henceforth, countries are inherently interested in the positive functioning}

of the treaty and in the effective joining of other countries, meaning that membership to it it is not just a sign of “good will” (Choet al, 2012) as it is generally with human rights treaties.

However, although the coordination of policies of major global actors has increased

and the Palermo protocol has been widely ratified by states9_{, the essentials traits of}

human trafficking, like deception, coercion and exploitation and even the definition and identification of a victim can be much more difficult to operationalize and ascertain. Infact, human trafficking is perpetuated in clandestine conditions and is often done by criminal organizations hence falling in the big “ black box” of shadow economy phenomenon that are typically difficult to be measured. Moreover, victims are unlikely to report directly the suffered abuses. Infact, they might be unaware of the legal protection system that is provided for such a crime, conversely, they can trust their trafficker being an acquaintance or, lastly, they might fear to be harmed or caught again.

Secondly, there are difficulties in isolating the fundamental traits that define a victim of human trafficking compared to a smuggled migrant or an irregular migrant. As a matter of fact, victims of human trafficking generally shares vulnerabilities, abuses or experience situations that are also typical of these groups. Henceforth, in principle these three categories are different but, in practice, a victim of human trafficking might as well be an irregular migrant and might have used smuggling services in order to arrive in a

8_{the website of the EU-Anti Trafficking Coordinator can be retrieved at:}

https://ec.europa.eu/anti-trafficking

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country. This linkages will be further investigated in the following sections and will be also tested in the empirical section.

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2.1.1 The blurring line between Human trafficking and irregular migration

In this section, the link between human trafficking and migration will be further ex-panded given its relevance and centrality for this thesis. Infact, as mentioned above, human trafficking might be more probable for those group that are already in vulnerable situations. In such a case, irregular (or illegal) migration offers the perfect background for this crime to be perpetuated. Once a migrant falls within the murky boundaries of illegal activities, he or she can not rely on rule of law and frequently the services offered by a smugglers so to finalize the original intent of migrating may soon be transformed in different forms of exploitation, perpetuated through coercion, debt bondage and other illegals means.

But then, there is a fundamental question that need to be addressed: defining irregular migrants/migration and, in a second stand, understand why they often ends up being trafficked or smuggled.

Although, nowadays these worlds are frequently used, especially in relation to the con-temporary “migration diaspora” identifying an illegal migrant might be difficult. Firslty, it must be stressed that irregularity does not refer to the individuals but to their migra-tory status at a certain point in time (Lazcko and Mcauliffe, 2016). Changes in national laws and policies can turn regular migration into irregular migration, and vice-versa. The status of migrants can change during their journey and stay in the country of tran-sit/destination, which makes it difficult to have a comprehensive picture of irregular migration and the profiles of irregular migrants. Moreover, often measuring irregular migrants means computing a stock measure whereas ascertain irregular migration com-prehends figuring out a flow measurement (Vespe et al, 2017).

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definition of irregular migration. For example, the International Organization for Mi-gration (IOM) defines it as “movement that takes place outside the regulatory norms of the sending, transit and receiving country” (IOM, 2011). Following such definition there could be underlined the following circumstances:

• migrant may enter the country irregularly, for instance with false documents or without crossing at an official border crossing point;

• a migrant may reside in the country irregularly, for instance, in violation of the terms of an entry visa/residence permit;

• a migrant might be employed in the country irregularly, for instance he or she may have the right to reside but not to take up paid employment in the country.

For what concerns the European Union, the EMN, european migration network, specif-ically defines irregular migrants as: “ third-country national present on the territory of a Schengen State who does not fulfill, or no longer fulfills, the conditions of entry as set out in the Regulation (EU) 2016/399 (Schengen Borders Code) or other conditions for entry, stay or residence in that EU Member State”.

Henceforth, given the clandestine nature of irregular migration and the fact that mi-grants’ legal status can be subject to frequent change, added to problem of a general accepted definition, the result is severe problems in quantifying and recording irregular migrant stocks. The same goes for irregular migration flows, as these include inflows and outflows of irregular migrants, as well as migrants who move in and out of irregularity within the same country, and births and deaths within the irregular migrant population, which are all difficult to track (Ardittis and Laczko, 2017).

For what concern EU the size of the irregular migrant stock in 2008 was measured to be between 1.9 and 3.8 million, a decline from between 2.4 and 5.4 million in the EU-25

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in 2005 (Kovacheva and Vogel, 2009). However, there was a relative surge in irregular migration flows into the region in 2015 with over 1 million people people arriving to Europe by sea (IOM, 2015). In 2016, the total figure dropped significantly though it was still at higher levels than previous years; 387,895 irregular migrants reached Europe by land and sea (IOM, 2017). In December 2017, 176,452 irregular migrants had arrived in Europe by land and sea, almost all of them traveling along the Central route. It is important to recognize that an ostensible increase in irregular migration figures may not necessarily reflect an actual increase in the number of irregular migrants, but rather changes in policies and practices related to border and migration controls, as well as other administrative criteria and programmes. For example, if criteria for family re-unification change, some relatives may no longer be able to remain with their family members on their residence permits once these expire, thus becoming irregular. These issues hamper comparability of data collected within the same country over time. Given these methodological problems in assessing the magnitude of the phenomenon, it seems even more difficult measuring the proportions of victims of human trafficking or smuggled migrants among irregular migrants. Nevertheless, as UNODC reports, most detected victims of trafficking in persons (approximately 60%) are foreigners in the coun-try of detection, this implies that they are international migrants who have moved from one country to another. In addition, there is a good evidence that the nationalities of the detected victims of human trafficking have a good correlation with the flows of reg-ular migration to that countries ( and presumably the irregreg-ular flows should in a certain sense follow such a trend). For example in Germany, the majority (65 %) of the detected victims- as in the rest of Western and Southern Europe - come from the neighboring subregion of Central and South-Eastern Europe. At the same time, migrants from the different countries in Central and South-Eastern Europe represent the majority of the

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recent migrant flows into Germany, as in most of Western and Southern Europe. Sta-tistical analyses show that the citizenship profiles for recent regular migration flows and detected trafficking flows are similar. Moreover the same result observed for Germany is also detected for other Western European countries, including Italy, the Netherlands and Norway (UNODC, 2016). Beside such correlations, there is a part of the literature which suggests that evident migration flows are not sufficient to explain the interrelation between these different types “irregular movements”. As a matter of fact another neces-sary element, fundamental for the managing of these illegal activities, is the presence of transnational organized crime which is widely documented, at the EU level, by Europol. There are several detected groups mainly originating from Eastern european countries which operates in richer countries such as Germany, Netherlands and Austria. The typ-ical organisational structure of the criminal groups involved in THB consists of loose networks linked by kinship or ethnicity with interchangeable roles amongst members. Their flexibility and adaptability is shown by their presence in several countries and by their rotation of victims through different countries. These groups are able to adapt to changing circumstances and quickly respond to new opportunities, shifting their op-erations to other countries upon detection by law enforcement or if they consider the exploitation to be more profitable elsewhere.

The fact that the human trafficking shares with irregular migration the characteris-tics of irregularity and clandestinity leads often to confusing the two phenomena. By looking at their definitions it was cleared the fact that a victim of human trafficking conceptually do not perfectly match an irregular migrant. Nevertheless, within those irregular migrants that are smuggled, there is also a good part which is trafficked. There-fore a further clarification between human trafficking and human smuggling has to be

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described.

2.1.2 Human trafficking and human smuggling

In order to address efficiently the phenomenon of human trafficking and to perform empirical estimation, it is necessary to stress its definition and present the differences with other phenomenon that are “similar” to it. In this section, human trafficking is compared to human smuggling.

Generally, illegal movement of persons encompasses two related activities: migrant smug-gling and, as underlined before, the trafficking of persons for the purpose of exploitation. In short, both activities involve the recruitment, movement, and delivery of migrants from a host to a destination state. What separates the two activities, however, is that the traffickers enslave and exploit trafficked persons, while smuggled migrants have a consensual relationship at the onset with their smugglers. Moreover, many smuggled individuals are free at the end of their journey or after a period of indentured servitude. There is growing global recognition that migrant smuggling is an increasingly significant aspect of irregular migration for many regions and thousands of migrants globally (). In the context of Europe, the discourse on migrant smuggling to and within the conti-nent goes hand in hand with the discussion about irregular migration. It is estimated that roughly 90 per cent of all migrants that cross Europe’s external or internal borders unlawfully rely at some point of their journey on the services of a smuggler (Europol, 2016). In the theoretical literature, Salt and Stein’s seminal work on migrant smuggling in 1997 involved the depiction of smuggling as one aspect of the illicit side of interna-tional migration business. Smuggling is conceptualized as a profit-driven activity within a broader business system, whereby the smugglers’ main motivation is profit, and the common point of intersection with migrants is financial (Salt and Stein, 1997).

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The legal definition of human smuggling, internationally accepted, is presented in the Article 3 of the Protocol against the Smuggling of Migrants by Land, Sea and Air which was adopted together with the UN convention against Transnational Organized crime. The article reports the following definition:

“Smuggling of migrants means the procurement, in order to obtain, directly or indirectly, a financial or other material benefit, of the illegal entry of a person into a State Party of which the person is not a national or a permanent resident.” (UN 2000b)

Henceforth, in this definition migrant smuggling is a crime concerning the facilitation of the illegal border crossing of a person into a State party of which a person is not a national or a resident in order to obtain a financial or other material benefit.

For what concern EU, the definition adopted slightly differs from the one of UN in that it allows for optional exemption of punishment for those providing humanitarian assis-tance (EU Directive 2002/90). Nevertheless, much of the legislation on the topic is left to the member states providing a jagged rule of law (Eu Parlamient, 2016:11).

Looking at the consequence of human smuggling, its first direct impact is that smug-gling of migrants across international borders on routes traversing land, air and sea undermines migration governance and impedes safe and orderly migration. Neverthe-less, stricter migration policies may, in a certain sense, favor such a phenomenon (Friebel and Guriev, 2006). Neumayer (2006) defines the effect of stricter policy as “an unequal access to space” which is particularly detrimental for citizens of certain countries. Infact, on the one hand, there is no doubt that cross-national movement, both short-term and long-term, has increased dramatically over the last three decades due to the lower costs of communication and transportation and the more important global dimension of

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mar-kets and supply chains. On the other hand, borders of states have become increasingly closed, imposing particularly severe visa restrictions on passport holders from certain countries. The consequence might be that migrants are obliged to refer themselves to illegal organizations. For example, starting from the adoption of Schenghen, EU mem-bers imposed visa restriction to 73 countries which became 131 in 2001. This policy continues to be largely applied by the EU but there are some interesting exemptions. For example countries which share borders with EU or aims at being part of it, have a less severe visa policy. This is the case of Ucraine, Albania and other eastern european

countries10_{. However, in most of case, the result of this policy scheme is that migrant}

smugglers have become an integral part of the irregular migration journey, resulting in enormous profits for criminal smuggling networks while reducing the ability of States to manage their borders and migration programmes (IOM, 2016).

And it precisely the link with migration that nested the concept of human smuggling and human trafficking. Infact, as UNODC reports, is true that trafficking victims are not always migrants and, according to the legal definition, victims do not need to be internationally moved to be considered as having been trafficked. However, the stories of victims of trafficking often start as attempts to improve life, as is also the case with many migration stories and human smuggling. Moreover, there is also increasing recognition of shifts in smuggling processes that further blur the line between human trafficking and mi-grant smuggling, acknowledging that it has never been clear cut (Carling, Gallagher and Horwood, 2015). While human trafficking involves coercion (whereas migrant smuggling does not), there is increasing awareness of the potential for coercion and exploitation of smuggled migrants who may find themselves in highly exploitative conditions during

or after the event. Interestingly, V¨ayrynen (2005), points out that illegal migration,

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smuggling and trafficking shares, perhaps, the illegal character of the entry to a coun-try. Thus, migratory movements comprising illegal border crossing and/or unauthorized stays in the country of destination are essential components of both human smuggling and trafficking. Nevertheless, the economic deliberations, as well as the steps undertaken by the agents involved, are distinct. The basic matter of smuggling deals with assistance in border crossing. The smuggler receives financial remuneration before the journey and acts as a support in illegally crossing international borders. Most importantly, the smug-gled individual is free upon arrival in the destination country. With human trafficking, the intermediary earns from transporting the individual and from exploiting or selling him/her in the destination country. This is possible through physical coercion, fraud or deception at any point during the trafficking process, and it is made easier when financial remuneration is still expected by the smuggler after the trafficked individual has arrived in the destination country. It is important to highlight that in many cases people get trafficked without receiving assistance in illegally crossing an international border. Peo-ple can enter the country of destination legally with an official document after they have been promised a job as waitress, model or construction worker for example, and only realize their victimization upon arrival. After entering the country, they usually have to handover their legal documents and are forced to work in the prostitution business and/or face slave-like conditions. In other cases, individuals can enter the country with a valid short-term visa and accept a job offer that requires them to remain in the country illegally after the document expires. In such situations, individuals often have to pay exorbitant amounts of money to the employer for the journey and/or to retrieve legal documents, which implies that they have been exploited (Aronowitz 2001). In these instances of human trafficking, individuals have crossed an international border legally, thus making it even more difficult.

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In consequence, it may in certain circumstances be more appropriate to use the term “trafficking” generically to include “smuggling”, leaving abusive exploitation” to describe those employment conditions that contravene human rights and are usually illegal (Salt and Stein, 1997).

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2.2 Trends in Human trafficking

Trafficking in persons is a phenomenon that has distinguished particularly the last twenty years. Being able to rule out all the deep causes of this phenomenon is particularly dif-ficult. When we consider only international trafficking one of its main cause should be found in globalization ( especially in its impact on mobility) and its partial fail to reduce the severe inequalities affecting different population. Moreover, it is difficult to determine “the importance” of human trafficking since we do not have reliable data and especially data which can uncover its proportion with respect to the total population of a country or with respect to migrants, for example.

Nevertheless, there is evidence of its presence and there are interesting data that can help to evaluate it.

For instance, the most updated statistics for human Trafficking can be founded in the UNDOC report for human trafficking (2016) where government administrative data are aggregated. Researchers found that between 2012-2014, 63,251 victims were detected in 106 countries and 57% of these victims were trafficked internationally. Unfortunately, trafficking in person is a highly gendered crime, with female being a large part of the detected victims. Infact, Women and girls comprise the 71% of the victims detected in 2014 by UNODC. The same result is also shown by Eurostat (2015) that compiles a similar report to UNODC tough only for Europe. In the EU, between 2010 and 2012 (the last figures available from EUROSTAT), the majority of detected victims, around of 30000 for the EU-28, were as well female, as shown in figure 2.1. Nevertheless, the presence of men among victims has steadily risen in the last years.

Data released by IOM are really clear from this point of view. Between 2006 and 2016 the share of male victims on the total of detected victims globally has steadly risen, see

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Figure 2.1. Trends in the shares of female and male victims in the EU-28 2010-2012. Source: EUROSTAT

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figure 2.2. This phenomenon could be just the tip of the ice-berg given that we do not

Figure 2.2. Trends in the shares of men among detected trafficking victims, 2006-2016. Source: IOM

know the total population affected by human trafficking.

This trend is valid also for Europe where from 2010 to 2011 we observe a 40% increase in the number of males (see figure 2.1). Indeed, in the last report released by Eurostat on human trafficking, 71% of the victims affected by labor exploitation were men (EURO-STAT, 2015). ILO (2012) global estimates for forced labor, state that 20.9 million people are victims of forced labour globally, trapped in jobs into which they were coerced or deceived and which they cannot leave. Human trafficking can also be regarded as forced labour, and so this estimate captures the full realm of human trafficking for labour and sexual exploitation, or what some call “ modern-day slavery”. The data from which the estimate derives cover the study reference period of 2002- 2011. The estimate therefore means that some 20.9 million people, or around three out of every 1,000 persons

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world-wide, were in forced labour at any given point in time over this ten-year period. Generally men are more frequently exploited in some sectors of the economy (i.e: con-struction, agriculture, fishing industru etc.). For example, IOM counts that overall, 40% of male victims works in the construction sectors whereas agriculture, factor work and fishing counts between 10% to 15%. Nevertheless, also women are increasingly more exploited for domestic works and farm works. Interestingly, IOM data show that in 2016 also the majority of women was exploited for labor, contraddicting the evidence from UNODC. Though it might be difficult to ascertain which dataset grasp better the phenomenon, it is certain that labor exploitation is rising.

Another interesting trend, is the correlation between huaman trafficking and migration flows. Infact, IOM (2010) underlines that the probability of being trafficked increase sharply in more vulnerable group of people as migrants, refugees or displaced people UNODC sustains that human trafficking increases if migration flows increase. Being the latter a structural phenomenon of our society, it is clear that human trafficking could rise more in the future. Looking at the numbers, in 2015 the United Nations estimated that there were some 244 million international migrants across the world; an increase of more than 40% since the year 2000 (UNODC, 2016). Such figure corresponds just to the 3% of the global population, suggesting that living within the same country remains still the norm. However, the most volatile element in projections of the global popula-tion remains migrapopula-tion. Demographers have estimated that in 2050 there will be 405 million international migrants globally (IOM, 2018). What it is interesting is that traf-ficking flows resemble quite well migration flows as it is shown in figure ??. In addition to this, IOM (2016) estimated that around 77% of the detected victims between 2012 and 2014 were trafficked internationally, meaning after or for crossing a border.

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Typi-Figure 2.3. Main destinations of transregional flows and their significant origins, 2012-2014. Source: UNODC

cally, the majority of migrants that have been trafficked are directed to richer countries such as western Europe. Although it is difficult, there is evidence that the percentages of detected citizenship among victims are well correlated with the migration flows the country is receiving (UNODC, 2016). It is suspected that such a correlation could be even higher when checking for irregular migrants nationalities. FRONTEX (2018) risk analysis underlines that almost a million of people enter irregularly in Europe in 2015. This number has seen a drastic reduction in 2016 and 2017 but the pressure on euro-pean borders remains high. Unfortunately, data on irregular migrations are difficult to be obtained and too scarce in order to draw inference with respect to human trafficking.

Another important element that emerges from the latest available data and that can be considered a robust finding is the fact that most trafficking flows are not of a global dimension and trafficking in persons remains largely a regional and local phenomenon. For what concern Europe and especially Eastern European countries, trafficking is

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gen-erally perpetuated with short distances movements and the destination of such flows are the richer neighbor western european countries: Germany, Austria, Netherlands etc. This actually suggests that differences in GDP per capita between near countries are significant in explaining TIP. Some scholars, as Shelley (2010), sustain also that hu-man trafficking has increased because of the decline of internal border controls under the Schengen Agreement without an enhanced cross-border law enforcement cooperation and legal harmonization among European states. Moreover, Shelley highlights that there are demographic reasons, namely the decline in birth rates, and labor market needs, such as the absence of a population able or willing to do physical labor as well as the relentless demand for inexpensive goods and services, that are not met by the native-population and are likely to drive the increase in TIP in next years.

All these elements do not suffice to describe human trafficking but they give an idea of its main characteristics which will be further discussed in the sections that follows.

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3 The limitations in data availability and data

qual-ity, which consequence for this research?

Many actors ask for a more data-driven and informed approach on human trafficking ( (Tyldum and Brunovskis,2005); (Tyldum, 2010); (G. M. Van der Heijden and Jan van Dijk, 2016) ). Indeed, this problem has been underlined in several occasions at the institutional level and has finally brought the UN statistical Commission to include “Eliminating human trafficking and forced labor” in the target 16.2 of the sustainable

development Agenda11_{. Such a decision is a formidable challenge for the state-of-art in}

collecting data on human trafficking and has given new strength to researching innovative

methodological tools12 to solve at least one the classical problem with data on human

trafficking, namely coverage of the target population.13.

Nevertheless, as noted by Lazcko and Gramegna already in 2003, the inexistence for many countries of a single agency that collects and harmonized statistics on human trafficking has caused severe problems to researchers in adequately answering to the request highlighted before. Indeed, there are also other more fundamental problems that make empirical research difficult. Infact, the primary reason for the unsatisfactory

11_{Specifically the Indicator 16.2.2 is defined as Number of victims of human trafficking per 100000}

population by sex, age and form of exploitation.

12_{An example is the current studying by UNODC, in collaboration with important statisticians in field}

as Peter G.M. van der Heidjen, of the possibility to apply Multiple Systems Estimation for estimating the number of victims of human trafficking across the world. This technique enables to estimate hidden population by matching multiple data source for the phenomenon of interest. Silverman (2014) applied for the first time MSE to count the number of victims in the UK. This new methodology is likely to portray interesting results for European countries.

13_{See Tyldum (2010) for a detailed description of the main problems regarding statistical collection}

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quality of the data is certainly due to the lack of harmonization in the legal definition of human trafficking between legal systems of countries (Van Dijik et al, 2014). The main effect is the incomparability of data which makes difficult to portray macro analysis on the phenomenon. Even when the same definition is shared by countries, i.e: The case of

the European Union14, there remains a serious concern for the incompleteness of data.

Infact, many countries are not able to produce all the relevant statistics15_{required with}

the consequence that data failed to be disaggregated by gender, age or other relevant variables, affecting the robustness of micro-analysis. In addition to this, some european countries, as France for example, publish statistics only regarding sex trafficking hence voluntarily not disclosing other relevant information.

In addition to the problems stated above, the public source available for data on human trafficking are scarce. A large part of empirical literature on human trafficking use data with restricted access (see for examplle Bettioet al, 2009) or specifically com-missioned surveys (see Mohammoud and Trebeschet al, 2010) making not possible to reproduce research or to create new one.

Given that the issues presented have had a relevant impact also in this particular re-search, in the following section is presented an overview of the available data/reports on human trafficking and the choices made in order to select the best data for the purpose of the research question.

14_{see the Directive 2011/36/EU on Preventing and Combating Trafficking in Human Beings and}

protecting its victims, adopted in 2011.

15_{EUROSTAT(2015) describes in detail the set of essential data that are requested from member}

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3.1 The existent data: what we have and what we would like to

have.

Among the different problems of data on human trafficking, two of them have had a considerable impact for this research. Firstly, data on human trafficking are generally not publicly available either for privacy reasons, data-quality issues or for policy priority

reasons.16_{. Secondly, in some cases there is a lack of a mechanism able to coordinate}

and standardize the disparate data collection systems. These problems were crucial in constructing the research question and, lately, which methodology could be chosen to tackle specific issues of data. Hence, it seems interesting to give an overview of the possible available data as well as their advantages and disadvantages.

Starting with the available dataset, there are five official institutions that collect data on human trafficking: IOM, UNODC, ILO, EUROSTAT and the US Department of State. The statistics that are provided by these organization could be categorized in:

• data sources on the profiles of victims of human trafficking,

• data on the prevalence of human trafficking and on related phenomena such as forced labour and forced marriage,

• data on compliance with anti-trafficking policies

Starting with the first category, IOM has made availbale in 2017 the CTDC database17

which provides micro-data on victims of trafficking in human beings. More specifically,

16_{In order to better understand the accessibility of data on human trafficking, several of the most}

important scholars in the research field were contacted. The majority of them has confirmed that they have used restricted access data obtained from the relevant institutions thanks to specific research projects.

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observations on victims of human trafficking represents those that have enjoyed direct assistance from IOM and include information about the victims’ backgrounds, trafficking locations and routes, how people fall into the trafficking process, associated forms of exploitation and abuse, sectors of exploitation, means by which victims are controlled, and some information on perpetrators. Tydilum (2010), in a review of the type of data available in the field of human trafficking, stated that data gathered from assistance programs are likely to be the best from an informative point of view. In addition to this, the database offers also an interesting time span, from 2002 to 2017 , for 172 country

of destination18 _{and 169 country of origin}19_{. Notwithstanding the significance of this}

database for the entire research field, observations are really sparse for some variables, reaching high proportions (around 90%) of missing information. In addition to this, these data suffer a problem which is a constant for data on human trafficking but more serious for this database; namely, the observations do not represent the entire population of trafficked victims but only those intercepted by IOM, or as well Polaris and LibertyAsia, in the places where one of this institution has a mission or is active. Henceforth, it seems that in this case is present a sort of “double self-selection mechanism” which, in a sense, reduces the quality of the information. Moreover, member states of the European Union are underrepresented in this database, with a total absence of countries like Germany, Italy or Netherlands that, on the contrary, present a relative high number of victims (EUROSTAT, 2015 and EUROSTAT, 2018). This might be precisely caused by the fact that IOM does not have an open mission in one of these countries and such omission is of course not suitable for our analysis.

18_{In the CTDC dataset the country of destination represents the country where the last exploitation}

of the victim has occurred.

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The other important UN agency that provides statistical information on victims and perpetrators of human trafficking is the United Nation Office for Drug and Crime (UNODC). These data are gathered by the UNODC from surveys to governments on trafficking victims identified in their respective countries and aggregated at the country level. Moreover, UNODC data are largely not only unit record information, but ab-solute numbers disaggregated by variables such as sex, age, and type of exploitation. Unfortunately, UNODC used to publish raw data but they are no longer publicly

avail-able20_{. Further investigations about this issue were made but it was not possible to have}

more information on the topic. Still, UNODC reports on human trafficking remain an important source for getting a general understanding of the phenomenon.

Within the above cited organizations only the US Department of state collects data on the compliance with anti-trafficking policies. Specifically, data and information are gathered from U.S. embassies, government officials, non governmental and international organizations and media and countries are indexed according to their compliance with

the Trafficking Victims Protection Act (TVPA)21_{, approved in 2000. Such act is the}

def-inition of human trafficking for the US legal system and it basically recall the Palermo Protocol of the same year. The Department places each country in this Report onto one of four tiers, as mandated by the TVPA. This placement is based not on the size of the

20_{UNODC published raw data only in 2006, making available an incidence reporting index, grading}

the level of human trafficking in/outflows on a scale of 0 to 5 based on incidences coded in international reports and media. This index covered up to 161 countries and aggregated numbers over the period of 1996–2003.

21_{Severe forms of Human trafficking are described as :“ sex trafficking in which a commercial sex act}

is induced by force, fraud, or coercion, or in which the person induced to perform such an act has not attained 18 years of age; or the recruitment, harboring, transportation, provision, or obtaining of a person for laboror services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery. (TVPA, 200)

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country’s problem but on the extent of governments’ efforts to meet the TVPA’s

mini-mum standards for the elimination of human trafficking22_{which are generally consistent}

with the Palermo Protocol. As stated by Choet al (2015) the problem of these data relies in the fact that US Department of State does not count victims but categorizes countries into major destinations/origins based on the classification of whether a country experiences more than 100 reported cases of in/outflows in a given year. This dummy remains constant for almost all the time periods and this might be not desiderable for certain type of empirical analysis. Henceforth, also this source was not useful for the purpose of this analysis.

Despite the specific problems whit each of three sources described above, a common problem to all of them is the fact that they report data only on identified victims which is just a share of the total population of trafficked victims. Contrary to this, ILO reports on Modern Slavery provide real estimates of trafficking for labor exploitation and for

sexual exploitation23_{. Such estimates were produced in 2005, 2012 and 2017 and they}

basically cover all the period between 2005 and 2017. Unfortunately, estimates are not comparable over time because both the methodology and the geographical boundaries of the area analysed have changed between the years. For example, for the global estimates of 2012, ILO used secondary data sources and applied a capture-recapture methodology in order to provide the desired statistics. On the contrary, for the 2017 report, 54 specially designed, national probabilistic surveys involving interviews with more than 71,000 respondents across 48 countries were used. Thus, from a theoretical point of view, estimates of trafficked victims should be preferred since they do not suffer from

22_{See page 39 of the report and forward for the definition of the tiers}

23_{Note that trafficking for sexual exploitation and labor exploitation are the most common type of}

trafficking but the official definition of trafficked victims entails also trafficking for begging and organ removals.

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the inhrently bias that characterize data on identified victims. However, in this case, it is not possible to create a long time series and, more importantly, the raw data used for the reports are not available. Hence, ILO estimates could be used in order to compare the rate of identified victims with the “true” population of victims of human trafficking but not to perform the desired empirical analysis.

The last source that provides data aggregated at the country level on the number of trafficked victims, as well as on numbers of traffickers, is EUROSTAT. The geographical area covered by its data collection has varied through the years. In general, in each series of eurostat statistical working paper on human trafficking all member states were present. Additionally, between 2008 and 2010 and 2011-2013 statistics were gathered also from Switzerland and Norway whereas statistics of candidate countries were col-lected only for the period 2008-2010. The deep advantage of eurostat statistics is their completeness through time (from 2008 to 2016), their availability and their homogene-ity. More specifically, the fact the data are agreggated by Eurostat and so following the same definition and rules, should assure an higher quality of statistics. However, they frequently fails to be disaggregated at higher level, hence reducing the scope of the research that might be implemented. Nevertheless, there is no other source that offers such a complete time series for trafficked victims for the European Union and so they are the natural best candidate to answer the desidered research question.

By this rapid review of the most importance sources on data of human trafficking it was clear that it might be not correct to assess that there is a lack of information on this topic. The real problem is that information is scarcely comparable and not avail-able for further investigation. Nevertheless, the progress made by Eurostat and the European Union in the organization of the collection of data and by the UNODC for the

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research of additional methodology to estimate the whole population of trafficked victims are promising for future research. For this thesis, Eurostat was regareded as the best source to finalize the desidered research question despite some inevitable disadvantages. RIVEDIIIII

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4 A theoretical framework for Human Trafficking: the

never ending research for an economic model.

Confining human trafficking in one field of research is difficult. Infact, it is a an under-ground phenomenon which affects societies in different ways. It certainly undermines the rule of law, breaking most of the fundamental human rights but it has also been described as a market functioning with the classical mechanism of supply and demand ((Wheathon et al,2010); (Akee et al, 2014)). Moreover, it highlights deficiencies in migra-tion policies and border managements both in source, transit and origin countries since can be fully acknowledged to be a type of international movement of persons ((Cho et al, 2015); (Rudolph et al, 2015)). Other scholars, as Shelley (2010), underline the fact that victims are generally employed so to obtain a competitive advantage with respect

to their competitors24_.

In the academic literature it is possible to distinguish a group of works that try to construct a theoretical model for human trafficking, emphasizing the mechanism of supply and demand of victims (Orrenius and Zavodny, 2015), and a more conspicuous empirical literature that tries to recover a narrative of the phenomenon starting from the data, using standard econometric tools. Despite the contribution of economic modelling in order to understand the process of human trafficking, some assumptions undertaken by these theoretical models seems unlikely, in some cases. On the other hand, empirical models seem to portraying intriguing results though they are likely to suffer important problems in the quality of the data used. In the following sections a full account of these different but linked paths of the academic literature will be analaysed.

24_{Shelley (2010) for example mention the italian case where victims of chinese nationality are employed}

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4.1 A simple theoretical framework

The search of a theoretical model that can describe human trafficking is a difficult task and, at the moment, the literature is still lacking a coherent and fully esplicative framework. Salt and Stein (1997) and Salt (2000) stressed the economic motive behind human trafficking. This hypothesis would have been central also to the subsquent liter-ature where authors applied in a more systematic way proper economics tools in order to investigate human trafficking

Starting with Salt and Stein (1997), they particularly underlined the link between migration and human trafficking. Specifically they see migration as an international business formed by “a system of institutionalized networks with complex profit and loss accounts, including a set of institutions, agents and individuals, each of which stands to make a commercial gain”. Neverthless, the global migration business is not homogenous and might be divided in a legal and illegal part and each part could be again subdivided,

representing a particular niche25 _{Of course, trafficking represents the illegal component}

of migration as a business, caused by reduced possibilities for migration as well as lax controls at the borders that favor the insurgence of a market for illicit services to mi-grants. In this view, human trafficking is seen an “intermediary organism” favoring migration between origin and destination country where the aim of traffickers is to make profit by favoring migration and at the same time exploiting the subject. The organi-zational set-up of this activity, as can be seen in figure?? resembles the one of business activities since traffickers need to manage the entire process of trafficking by organizing the movement of victims, providing themselves with the right information and, lastly, being able to maximize their profits through the exploitation or the selling of victims.

25_{In order to clarify the concept, a legal niche of the business of migration might be represented by}

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Salt and Stain’s theory is not formalized, neither empirically tested. However, the au-thors claimed their model was a good approximation of the results of some contextual IOM inquiries in Hungary, Poland and Ukraine. Although Salt and Stein idea is still compelling, it suffers from some drawbacks. Firstly, it basically assume that trafficking always entail crossing a border. Although trafficking is really frequent among migrants, we also know that it might also happen within the border of countries especially when there are high imbalances in terms of income and employment rates between regions. Secondly, and most importantly, trafficking is a phenomenon that has a wide geograph-ical distribution and the level of organization among trafficking organizations varies a lot within Europe (Europol, 2009).

A step toward more formalization was made by Wheaton et al (2010) that take as an assumption the idea of trafficking as business-oriented activity with the aim of profit, and try to widen the analysis by describing the mechanism of demand for victims and supply of them in the market of human trafficking. According to them, trafficking happens because there is an increasing risk for some people to become more vulnerable and, at the same time, businesses continually seek the lowest-cost labor sources. Since trafficking generates profit, a market for human trafficking is created. Their economic model aims at highlighting the choices individuals make in the in market for human trafficking under a framework of rational choice theory. Specifically, the market for trafficked people involves labor supply decisions by vulnerable populations, labor demand decision by employers, intermediary decisions by human traffickers and, lastly, users of slave-produced goods or services. In this specific model, human trafficking is modeled as monopolistically

competitive market26 _{with many sellers (traffickers) offering many buyers (employers)}

26_{For a reference on monopolistically competitive markets firstly introduced by Chamberleine in 1933}

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differentiated products(trafficked victims). On the one hand, traffickers are free to enter or exit the market, thus increasing competition, since law enforcement is low and profits are high. On the other hand, each trafficker behaves as a monopolist because he can

sells products which are different from its competitors27, this enables him to provide a

quantity which is less than the one of perfect competition.

Henceforth, vulnerable population is offering labor within the mechanism of rational choice theory but there might be some push factors (i.e: host of personal characteristics) and some pull factors (i.e: culture, political instability, corruption etc..) that make this people vulnerable to labor market exploitation and possibly to human trafficking. Once they depend from traffickers they are forced to do certain jobs and loose agency. On

the other side, traffickers seek to maximize their profit28 by doing this “intermediary

activity” for employers. As you can see in figure4.1, given the downward sloping demand of the employers, the traffickers is able to make a profit in the short run by imposing a price above the average total cost. In the long run the effect of the competition will reduce the profit of the traffickers, making the economic l profit zero but still providing a positive account profit (see figure4.2).

This model allows to study the effect of exogenous shifts in the supply or on the demand of trafficked victims caused by the implementation of policies of the state au-thorities for contrasting human trafficking. For example, policies aiming at increasing the costs for traffickers ( i.e: by imposing stricter penalties for convicted traffickers) will certainly lead, ceteris paribus, to an higher equilibrium price and so to a lower number of individuals exploited. However, there could be a major drawback to such a policy:

27_{In this case the possibility to sell differentiated products has to be interpreted in sense given by Bales}

(2005) who stresses the fact that trafficked victims are different because they need different attribute depending on the exploited labor to which they are destined (i.e: agriculture, constructions or sex work

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Figure 4.1. Short-run supply of a trafficker in a monopolistically competitive market

Source: Wheathonet al (2010)

Figure 4.2. Long-run supply of a trafficker in a monopolistically competitive market

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higher costs for traffickers without a reduction in the willing to migrate of victims could lead to harsher exploitative conditions or more dangerous trafficking routes. At the same time, the policy maker could be interested in lower the demand for trafficked victims. In the case of labor exploitation , this policy could be met by increase quality standards of employment though it would necessitate a coherent plan of random checks to employer’s venues thus being costly for policy makers. However, this policy would certainly increase the cost of hiring a trafficked worker and so reduce the number of exploitation cases. On the other hand, when trafficking entails sexual exploitation, the policy maker could liberalize the market of prostitution or decide to establish stricter laws for it. The effect of these policies is not sure and there is a huge debate in the literature propending to the first solution (Di tommaso et al, 2009) or the second one( Choet al, 2013).

This model was one of the first attempt to order a subject where knowledge is still sparse. In addition to this, it enables to understand some of the mechanisms that the policy maker could use in order to contrast human trafficking. Nevertheless, there are some assumptions that seem too optimistic. Firstly, although this models relies on the hypothesis of rational theory, behaviors of agents are not micro-founded and so analysis could be not fully developed. Moreover some authors, as Dainalova-Treinor and Berter (2006) underlined back in 2006 that: “ human trafficking market could be better resemble by severe violations of assumptions like perfect information and rational choice theory”. Infact, it is hard to constrain an illicit market to the dimension of rational choice theory, in the sense that the agents interacting might not always optimize their choice. Consider for example traffickers: they could be forced to choose less remunerative roots in relative terms due to higher law enforcement or creation of legal channel of immigration and this might be a stable equilibrium for a period of time. A similar argument could be also used for buyers. Secondly, Wheaton et al (2010) stress that “Economics models the labor

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supply decision by vulnerable individuals” but then it is not clear how they end up being trafficked: it seems a straightforward process. Probably, it would be really interesting to speculate more on the highly diverse set of information that the agents have and the consequence of the abuse of power that this different sets provoke. Moreover, as Dainalova-Treinor and Berter (2006) sustains market imperfections and market failures are likely to pervade the market of human trafficking, hence not being able to generate a market clearing equilibrium. As a matter of fact, they state that: “there is often no direct and observable transaction that involves the buying and the selling of a victim. This is because recruiters and the exploiters are often all part of the same trafficking network or organization”. Practically, imagine to have a demand and supply of trafficked victims reflected by the following equations:

Qd= α + α1X + α2P + u (4.1)

Qs= β + β1X + β2P + u (4.2)

Q = Qs= Qd (4.3)

Where X is a set of exogenous factor, P is the price and the last condition represents the equilibrium quantity. If Dainlova-Trener and Berter were right, than this system could not be solved since it is impossible to determine prices. In their view such a situation would be justified by the fact that recruiters and traffickers might be part of the same organization, defining it as integrate criminal activity motivated by profit maximization. The last important work to be mentioned in order to clarify a theoretical framework for human trafficking is a paper of Akee et al (2014). They constructs a two-way bilateral bargaining model in order to better understand the negotiation problem of an interna-tionally mobile trafficker. Their analysis is based on a study of the UNODC (2009) that stress the importance of local criminal networks in source countries for the organization

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of trafficking activities. Being this the situation, policies for contrasting trafficking might have different effects, reinforcing or counteracting one another, in source and hosts coun-tries. Starting from an important work of Becker et al (2006) which studies the effect of law enforcement on the volume of illict-drug activities, the authors suggest that the observed effect depends on the elasticity of demand and on traffickers’ ease on crossing borders and costs in finding buyers. Henceforth, their analysis underscores the challenge that policy makers can face in their efforts to coordinate policies internationally in the presence of internally mobile traffickers. In addition to this, by endogenezing the willing to pay of the buyers and the reservation prices of traffickers in destination and source countries, they are able to depart from a competitive setting, sustaining that clandestine operations of the trafficking markets naturally increase costs and are better represented by bargaining between the buyer and the seller.

Their model is tested using cross-sectional data from the TIP report (2003) (U.S. De-partment of state) and HR report (2002), aiming at identifying the push and pull factors of cross-border trafficking by using a modified gravity model approach. The outcome variable of interest in this trafficking flow model is whether there is any reported inci-dence of human trafficking from country S (source) to country H (host). Specifically the authors seek to disentangle the effect of legal amnesties for trafficked victims in host countries and law enforcement against prostitution both in source and host coun-tries. For what concern the latter case, with inelastic demand, heightened enforcement in the host country can raise the willingness to pay for trafficked victims in the host country, encouraging transnational trafficking. Moreover, if the trafficker can rapidly and cheaply switch between foreign and domestic market, heightened enforcement can raise the reservation price of a trafficked victim and so profitability of transnational trafficking. Henceforth, such an evidence not only confirms the theoretical provisions of

Trafficking in Human Beings: an empirical investigation for Europe.

University of Pisa

Master of Science in Economics