Incentives matter, edition #4637

Many developed countries currently both face and resist strong migratory pressure, fueling irregular migration. The Central Mediterranean Sea is among the most dangerous crossings for irregular migrants in the world. In response to mounting deaths, European nations intensified search and rescue operations in 2013. We develop a model of irregular migration to identify the effects of these operations. Leveraging exogenous variation from rapidly varying crossing conditions, we find that smugglers responded by sending boats in adverse weather and shifting from seaworthy boats to flimsy rafts. As a result, these operations induced more crossings in dangerous conditions, ultimately offsetting their intended safety benefits due to moral hazard and increasing the realized ex post crossing risk for migrants. Despite the increased risk, these operations likely increased aggregate migrant welfare; nevertheless, a more successful policy should instead restrict the supply of rafts and expand legal alternatives for migration.

While I agree with that policy recommendation, I say good luck with that one.  “Not enough people are dying” is what one of those harsh, old school economists might have said instead.  Good thing we got rid of them.

In any case, that article is by Claudio Deiana, Vikram Maheshri, and Giovanni Mastrobuoni, forthcoming in the American Economic Journal (Economic Policy), with the title being “Migrants at Sea: Unintended Consequences of Search and Rescue Operations.”