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War on drugs, violence, and the share of low-income workers in Mexico

Author

Listed:
  • Carlos A. Carrasco

    (Departamento de Economía, Universidad de Monterrey (UDEM))

  • Mario Durán-Bustamante

    (Escuela Superior de Economía, Instituto Politécnico Nacional (ESE-IPN))

Abstract

We analyse the average effects of increased violence generated by Joint Interventions (Operativos Conjuntos) within the so-called war on drugs at the municipal level in Mexico on the percentage of the working population earning twice the minimum wage or less. We implement a semiparametric difference-in-differences approach (Abadie 2005; Houngbedji 2016) by constructing a treatment dummy variable for the most violent municipalities of Mexican states treated by Joint Interventions. This approach uses covariates to adjust the differences between groups before the treatment through propensity scores. Consequently, assuming similar pretreatment characteristics in covariates, in the absence of the treatment, treated individuals would have a similar outcome relative to the nontreated group. After controlling for socioeconomic characteristics, results show an increase in the share of low-income workers in the most violent municipalities. Additionally, results show that the more violent the municipality is, the larger is the increase in the share of low-income workers. Our results are robust to changes in the sample and to changes in the construction of the treatment variable. Finally, we discuss some public policy implications.

Suggested Citation

  • Carlos A. Carrasco & Mario Durán-Bustamante, 2018. "War on drugs, violence, and the share of low-income workers in Mexico," Economics Bulletin, AccessEcon, vol. 38(2), pages 696-702.
    • Handle: RePEc:ebl:ecbull:eb-18-00121
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    References listed on IDEAS

    as
    1. Enamorado, Ted & López-Calva, Luis F. & Rodríguez-Castelán, Carlos, 2014. "Crime and growth convergence: Evidence from Mexico," Economics Letters, Elsevier, vol. 125(1), pages 9-13.
    2. Ms. Concha Verdugo Yepes & Mr. Peter L. Pedroni & Xingwei Hu, 2015. "Crime and the Economy in Mexican States: Heterogeneous Panel Estimates (1993-2012)," IMF Working Papers 2015/121, International Monetary Fund.
    3. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    4. Enamorado, Ted & López-Calva, Luis F. & Rodríguez-Castelán, Carlos & Winkler, Hernán, 2016. "Income inequality and violent crime: Evidence from Mexico's drug war," Journal of Development Economics, Elsevier, vol. 120(C), pages 128-143.
    5. O'Rourke, Kevin H. & Sinnott, Richard, 2006. "The determinants of individual attitudes towards immigration," European Journal of Political Economy, Elsevier, vol. 22(4), pages 838-861, December.
    6. Nancy Lozano-Gracia & Gianfranco Piras & Ana Maria Ibáñez & Geoffrey J. D. Hewings, 2010. "The Journey to Safety: Conflict-Driven Migration Flows in Colombia," International Regional Science Review, , vol. 33(2), pages 157-180, April.
    7. Ashby, Nathan J. & Ramos, Miguel A., 2013. "Foreign direct investment and industry response to organized crime: The Mexican case," European Journal of Political Economy, Elsevier, vol. 30(C), pages 80-91.
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    Cited by:

    1. Jose Roberto Balmori de la Miyar, 2020. "Breaking sad: drug-related homicides and mental well-being in Mexico," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(4), pages 513-531, December.
    2. Luisa Blanco & Robin Grier & Kevin Grier & Daniel Hicks, 2021. "Household responses to escalating violence in Mexico," Applied Economics Letters, Taylor & Francis Journals, vol. 28(4), pages 315-318, February.

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    More about this item

    Keywords

    War on drugs; Violence; Low-income workers; Mexico;
    All these keywords.

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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