POLICY BRIEF April 2022 Economic Shocks and Human Trafficking Risks Evidence from IOM’s Victims of Human Trafficking Database Every year, millions of people worldwide are trafficked, data makes it harder for governments to adopt effective which has a profound impact on development and vul- policies to reduce human trafficking and limits the ability nerable populations. There are no global estimates of the of other anti-trafficking actors, including international or- prevalence of human trafficking. However, the Interna- ganizations, non-governmental organizations, and donors tional Labour Organization (ILO), the International Orga- to help mitigate the risks of human trafficking. nization for Migration (IOM), and the Walk Free Founda- tion believe that 25 million and 15 million crimes in the The World Bank and the International Organization for related area of forced labor and forced marriage respec- Migration (IOM) place importance on advancing an un- tively were committed for the year 2016 (ILO 2017). These derstanding of the drivers of human trafficking (Box 1). To crimes are ubiquitous, affecting all regions of the world. gain a better understanding of these drivers, the World The prevalence of what ILO, IOM and the Walk Free Foun- Bank and IOM (2022) joint report, “Economic Shocks and dation call “modern forms of slavery” ranges from 2 cases Human Trafficking Risks: Evidence from IOM’s Victims of per 1,000 inhabitants in the Americas, to 7.6 cases per Human Trafficking Database,” analyzes a unique micro- 1,000 in Africa, with the Arab States (3.3 cases per 1,000), level trafficked victims’ database compiled and updated Europe and Central Asia (3.9 cases per 1,000) and Asia and by IOM. The report tries to answer two key analytical the Pacific (6.0 cases per 1,000) in between (ILO 2017). questions: First, do economic shocks increase detected These figures suggest that about a quarter of all persons human trafficking cases from and within countries of ori- in forced labor are children (ILO 2017). gin? Second, can good institutions—ones that can enable adherence to the rule of law and the provision of access Human trafficking is a violation of fundamental human to justice or anti-trafficking measures in particular—and rights and is linked to a range of core development issues, social assistance moderate the possible negative effects of including poverty and vulnerability, gender and racial in- economic shocks on trafficking cases in origin countries? equality, and gender-based violence. The Sustainable De- velopment Goals include a target to end modern slavery Through its support to victims of trafficking, IOM has de- and human trafficking by the year 2030. Human trafficking veloped the largest database of human trafficking cases in is a multifaceted crime that involves many perpetrators, the world. IOM’s database only covers countries with routes, sectors, victims, and forms of exploitation. The where the organization has a presence on the ground and complexity and hidden nature of human trafficking crimes only captures trafficking victims who received its assis- makes the practice harder to measure, to identify long- tance (including those initially identified by partners who term trends, and to determine the impact of anti-traffick- are later referred to IOM). IOM’s Victims of Human Traf- ing initiatives. ficking database contains information of the victims’ citi- zenship and country of exploitation. Governments are increasingly concerned about human trafficking but understand relatively little about who is The report focuses on risk factors that are expected to involved, how it operates, and what enables or constrains increase the vulnerability to human trafficking from and it. The illegal—and thus less visible—nature of the crime within origin countries such as economic shocks, mea- makes it difficult to investigate. The lack of micro-level sured by large, discrete changes to export commodity 1 POLICY BRIEF  •  APRIL 2022 BOX 1. The World Bank’s and IOM’s approach to addressing trafficking in persons Understanding the drivers of human trafficking is important for the World Bank’s efforts to address sexual exploitation, forced labor, and child labor in its development projects. The World Bank’s Environmental and Social Framework’s requirements related to labor and working conditions acknowledge these vulnerabilities associated with human traf- ficking (Environmental and Social Standard 2). It also provides guidance on preventing sexual abuse and harassment and prohibits forced labor and the employment of trafficked persons within World Bank projects. Protecting the poor and vulnerable from risks is an important part of the World Bank’s approach to enhancing the lives and capabilities of every human being through economic growth, sustainability, and inclusion. Human trafficking remains a risk for many, especially in the aftermath of shocks. At the core of the World Bank Group’s development man- date is a commitment to protect people and especially those who are most vulnerable so that everyone—regardless of their gender, race, religion, ethnicity, age, sexual orientation, or disability status—benefits from development. Pro- tecting the vulnerable therefore involves improving the access of all people, including the poor and disadvantaged, to education, health, social protection, infrastructure, employment, financial services, productive assets and justice institu- tions. Through this approach, the World Bank helps countries address the underlying drivers of human trafficking. The International Organization for Migration is the lead intergovernmental organization in the field of migration. In line with the 2030 Agenda and the GCM, IOM follows a rights-based approach and supports states to uphold migrants’ rights, and migrants and communities to realize their rights. IOM recognizes the link between migration and economic, social, and cultural development (IOM Constitution), and this report helps to further an understanding of this dynamic through a counter-trafficking lens. IOM has been implementing counter-trafficking programming for over 25 years and assists nearly 8,000 victims of trafficking across the globe each year. IOM’s interventions span from protecting victims of trafficking, to the sensitization and capacity building of justice systems, border control, migration law and policy. It encompasses the strengthening of national systems and responses, as well as private sector engagement, ethical recruitment, due diligence, and remediation measures. IOM supports the production of new evidence to inform the response to trafficking, such as through this joint study. This publication centers on the values of human rights, dignity and wellbeing, all values that are enshrined in IOM’s constitution and institutional approach. IOM also places great importance on the prevention of sexual exploitation, abuse, and harassment (PSEAH), which is mainstreamed throughout the Organization’s work (IOM Strategic Vision, 2019–2023). prices and to GDP. It also explores the role that institu- On the other side, the analysis suggests that good gover- tions play through enforcing the rule of law, providing ac- nance institutions and particularly a commitment to the cess to justice, and implementing anti-trafficking policies, rule of law and access to justice as well as stricter anti- as protective factors that could weaken the link between trafficking policies and social assistance can have a limit- economic shocks and an increase in human trafficking. ing effect on the number of observed cases of trafficking The analysis verifies that economic shocks are significant following economic shocks (figures 1 and 2). risk factors that increase vulnerability to human traffick- ing. In origin countries, economic vulnerabilities—espe- As one of the most comprehensive empirical analyses of cially those caused by global commodity price shocks— human trafficking cases to date, this study enhances the are strongly positively correlated with observed cases of understanding of the determinants and patterns of hu- trafficking. For instance, the economic shock produced man trafficking. It empirically documents the relationship by a typical decrease in export commodity prices is as- between economic shocks and human trafficking. While sociated with an increase in the number of detected vic- the study sheds light on some key drivers of trafficking, tims of trafficking of around 12 percent. explaining trafficking routes, individual- level risk factors, 2 EVIDENCE FROM IOM’S VICTIMS OF HUMAN TRAFFICKING DATABASE POLICY BRIEF  •  APRIL 2022 FIGURE 1. Access to Justice Marginal Effect of GDP Shock on Trafficking Victims 2 Smaller effect of economic shocks on detected trafficking 1 0 0.25 0.50 0.75 1.00 V-Dem Access to Justice Better access to justice Note: This figure plots the marginal effect of per capita GDP shocks on the log number of registered trafficking victims for every level of the V-Dem Access to Justice score. The solid line indicates the point estimates and the shaded area highlights the 95 percent confidence interval of the estimation. The x-axis measures whether citizens enjoy secure and effective access to justice. Higher values indicate that citizens enjoy greater access to justice. FIGURE 2. Rule of Law Marginal Effect of GDP Shock on Trafficking Victims Smaller effect of economic shocks 1 on detected trafficking 0 −1 0.00 0.25 0.50 0.75 1.00 V-Dem Rule of Law More effective rule of law Note: This figure plots the marginal effect of per capita GDP shocks on the log number of registered trafficking victims for every level of the V-Dem Rule of Law score. The solid line indicates the point estimates and the shaded area highlights the 95 percent confidence interval of the estimation. The x-axis measures the degree to which laws are transparently, predictably, impartially, and equally enforced and the extent to which the actions of government officials comply with the law. Higher values indicate stronger rule of law institutions. ECONOMIC SHOCKS AND HUMAN TRAFFICKING RISKS 3 POLICY BRIEF  •  APRIL 2022 or which interventions are likely to reduce the practice employment, including in high-risk sectors. Human traf- goes beyond its scope. Given the data limitations, more ficking will remain a major risk after COVID-19 is brought confirmation is also needed on whether the results apply under control, which merits high levels of policy atten- outside IOM’s sample. Further, the aggregate-level data tion and resources. cannot speak to the specific drivers of human trafficking at the subnational and household levels. More fine- grained subnational and household-level data would be References needed to identify these drivers. International Labour Organization (ILO). 2017. Global Esti- mates of Modern Slavery: Forced Labor and Forced The findings suggest that COVID-19-induced economic Marriage. Geneva: ILO. shocks are likely to increase vulnerability to human traf- ficking (see UNODC 2021). Thus, policies to mitigate the United Nations Office on Drugs and Crime (UNODC). impact of these shocks are urgently needed. Govern- 2021. The Effects of the COVID-19 Pandemic on Traffick- ments have been forced to shut down economic activi- ing in Persons and Responses to the Challenges. A Global ties and close borders to curb the transmission of the vi- Study of Emerging Evidence. Vienna. UNODC. rus. Border closures in the midst of an economic shock can make migrants more likely to seek irregular migration World Bank and International Organization for Migration routes. The resulting rise in unemployment also deprives (IOM). 2022. Economic Shocks and Human Trafficking households of remittances, which will likely drive vulner- Risks: Evidence from IOM’s Victims of Human Trafficking able individuals to look for alternative sources of Database. Washington, DC: World Bank. © 2022 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. 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