The Human Capital Peace Dividend

While the literature has documented negative effects of conflict on educational outcomes, there is surprisingly very little evidence on the effect of conflict termination on human capital. We fill this gap by showing how the permanent ceasefire declared by FARC’s insurgency during peace negotiations with the Colombian government caused a large differential reduction on school dropout rates in the areas affected by FARC violence prior to the ceasefire, relative to other areas. Importantly, this is not driven by child soldiering. Rather, our evidence suggests that the dropout reduction responds to the falling victimization rates in areas that experienced FARC violence.