The Market for Mules: Risk and Compensation of Cross-Border Drug Couriers

52 Pages Posted: 14 Jun 2014

See all articles by David Bjerk

David Bjerk

Claremont McKenna College - Robert Day School of Economics and Finance; IZA Institute of Labor Economics

Caleb E. Mason

Brown White & Osborn LLP

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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.

Keywords: illegal markets, compensating wage differentials, drug smuggling, sentencing

JEL Classification: K42

Suggested Citation

Bjerk, David and Mason, Caleb E., The Market for Mules: Risk and Compensation of Cross-Border Drug Couriers. IZA Discussion Paper No. 8224. Available at SSRN: https://ssrn.com/abstract=2450415

David Bjerk (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Caleb E. Mason

Brown White & Osborn LLP ( email )

333 S. Hope St.
40th Floor
Los Angeles, CA 90071
United States
2134062949 (Phone)
2134062949 (Fax)

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