Analyzing the Social Cost of Human Trafficking: An Economic Framework
Richard H. Lotspeich, PhD | September 21 | 1:45-2:45 pm
Topic: Research, Conceptual | Knowledge Level: Advanced
This research uses economic theory to develop a framework for evaluating the full social burden that human trafficking imposes on societies. It opens with some basic economic concepts and clarifies human trafficking in the context of labor markets. Our methodology applies concepts of welfare economics and decision making under uncertainty to the specific problem of human trafficking in order to develop a quantitative social accounting framework that is informed by qualitative empirical description of human trafficking found in the literature. While some forms of human trafficking lie outside the framework, it is nonetheless useful for analyzing most instances. The project seeks to answer two basic research questions. First, what are the components of social cost that collectively comprise the aggregate burden that human trafficking imposes? Second, what empirical challenges must be faced to estimate actual measures of these components? This exercise in social accounting is extended to consider a corollary question. Since the demand for trafficked labor is ultimately based on production of socially useful goods and services, how can one evaluate these goods and services in relation to the social costs identified, while maintaining a clear and justified ethical perspective? There are three results from the research effort. Foremost, it provides a coherent framework for analyzing the social cost of human trafficking grounded in economic theory. Second, it reviews the problems and potential for applying the conceptual framework to calculate concrete estimates of cost components. Third, it develops an approach to think about the net gains from coerced labor. Accounting for net gains explains both the profit incentive to engage in human trafficking as well as its negative social impact, which justifies government intervention against it.
Presentation Objectives:
· Clarify the concept of human trafficking in the context of labor markets and introduce an economic framework to evaluate costs
· Elucidate four broad categories of social cost that result from human trafficking and social responses to it
· Identify challenges of gathering and evaluating data toward that objective
· Explain how consideration of useful goods and services produced by coerced labor can help us to understand the phenomenon of human trafficking and to evaluate associated measures of economic welfare in light of the social costs identified