Mexicans looking to cross the border into the US pay 2 to 3 years’ worth of salary for the pleasure. Prospective migrants in Third World countries pay more. People are willing to sacrifice so much because the benefits outweigh the costs.

Assuming a Mexican farmer earns $1500 a year compared to $15000 in the US. A $3000 smuggling fee is undeniably substantial, but an average Mexican worker would recoup the smuggling fee in under 12 weeks. Why aren’t more making the journey? It could be the danger of border-crossing, yet it’s lower than you’d expect. To say that even one in a thousand people die is an overestimate, and how much would money would I have to offer you to take that risk?

A fair concern is that the success rate is about 50%. Only half of the people who pay the fee get in, so we should double the cost.

If we try to put a number to the risk, say $1000, and double the smuggling fee, a typical Mexican worker recoups the costs in less than 2/3 of a year. After a full year, it would have been more than worth it.

We’ll need to look elsewhere to understand why illegal immigration is so low. Bryan Caplan argues that a strong contender is the lack of credit and insurance options. It probably won’t be surprising that most illegal immigrants can’t walk into a bank and get a loan. They can’t even get a credit card. To compound the inconvenience, they have no recourse if anything goes wrong. Without insurance, they’re risking their life savings when they cross the border.

The gains are as massive as they seem - the problem is that the deprived, hopeful immigrants can only rely on the black market. For many, that’s too high a price.