Profits and poverty: The economics of forced labour

This study presents estimates of illegal profits from forced labour at global, regional and sectoral levels. While the core methodology remains the same, some important refinements have been introduced. Illegal profits from forced labour in the services sector are estimated separately for the first time, alongside estimates of illegal profits in agriculture, domestic work, industry and forced commercial sexual exploitation. Critical assumptions made for the 2014 estimates on wages and labour income shares have been relaxed and replaced with observational data unavailable ten years ago. The study also exploits better data to estimate the value added at the sectoral level. Yet even with these improvements, the profits from forced labour remain difficult to estimate with precision because of their hidden and illicit nature. The remainder of this report is structured as follows. Section 1 provides a background discussion of the forced labour situation in the world today, drawing on the results of the latest global estimates of forced labour. Section 2 describes the methodology employed for the estimation of illegal profits. Section 3 presents the estimation results. Section 4 takes a separate look at an additional illegal profit source not included in the estimate of overall illegal profits – illegal profits arising from the unlawful recruitment fees and related costs that victims of forced labour must often shoulder. The last section concludes. An Appendix provides further technical detail on the methodology and the data used for the estimates of illegal profits.