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The Economic Burden of Crime: Evidence from Mexico

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  • Andrea Velásquez

Abstract

I estimate the impact of the recent and unprecedented surge in drug-related violence in Mexico on the labor market outcomes of Mexican workers. Using a nationally representative longitudinal data set that allows me to account for unobserved time-invariant heterogeneity, I find that there is a negative relationship between local violence and labor market outcomes. Self-employed individuals are the most sensitive to a violent environment, with men experiencing significantly reduced earnings and productivity, while women decrease their hours of work or exit the labor force entirely. I also find suggestive evidence that fear of victimization plays an important role explaining these changes.

Suggested Citation

  • Andrea Velásquez, 2020. "The Economic Burden of Crime: Evidence from Mexico," Journal of Human Resources, University of Wisconsin Press, vol. 55(4), pages 1287-1318.
    • Handle: RePEc:uwp:jhriss:v:55:y:2020:i:4:p:1287-1318
    Note: DOI: 10.3368/jhr.55.4.0716-8072R2
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    Citations

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    Cited by:

    1. Ham Gonzalez, Andres & Ruiz, Juanita, 2024. "The Labor Market Effects of Drug-Related Violence in a Transit Country," IZA Discussion Papers 17126, Institute of Labor Economics (IZA).
    2. Friehe, Tim & Do, Vu Mai Linh, 2023. "Do crime victims lose trust in others? Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    3. Sharma, Smriti & Sunder, Naveen, 2024. "Crime and Human Capital in India," IZA Discussion Papers 17037, Institute of Labor Economics (IZA).
    4. Arteaga, Julian & Shenoy, Ashish, 2022. "Mexican migration flows and agricultural labor markets in the U.S," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322311, Agricultural and Applied Economics Association.
    5. Kien Le & My Nguyen, 2023. "Armed conflicts and women's authority in intra‐household decision making," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(3), pages 249-267, July.
    6. Hale Utar, 2018. "Firms and Labor in Times of Violence: Evidence from the Mexican Drug War," CESifo Working Paper Series 7345, CESifo.

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