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Financial Support from the Family Network and Illegal Immigration

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  • Slobodan Djajić

Abstract

Barriers to immigration of low-skilled workers from developing countries into the advanced countries prevent many potential migrants from leaving their countries of origin. With very low home-country wages in relation to the cost of undocumented migration, the opportunity to migrate often hinges on the possibility of obtaining credit from a human smuggling organization or family and friends. This paper examines the conditions under which migration is optimal for an individual who lacks liquid assets, with a focus on alternative options for financing migration costs. One is by accumulating the required amount of savings out of source-country income, with or without financial support from the family or social network. The other is debt-bonded migration, which involves borrowing from a smuggling organization and paying off the loan while working in the host country. I find that greater financial support from the family network increases the attractiveness of debt-bonded relative to self-financed migration.

Suggested Citation

  • Slobodan Djajić, 2015. "Financial Support from the Family Network and Illegal Immigration," Review of International Economics, Wiley Blackwell, vol. 23(2), pages 387-403, May.
    • Handle: RePEc:bla:reviec:v:23:y:2015:i:2:p:387-403
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    File URL: http://hdl.handle.net/10.1111/roie.12169
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    References listed on IDEAS

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    Cited by:

    1. Slobodan Djajić & Alexandra Vinogradova, 2019. "Immigration Policies and the Choice between Documented and Undocumented Migration," Economica, London School of Economics and Political Science, vol. 86(341), pages 201-228, January.
    2. Slobodan Djajić, 2017. "Transit migration," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 1017-1045, November.

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