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The Labor Market Effects of Drug-Related Violence in a Transit Country

Author

Listed:
  • Ham Gonzalez, Andres

    (Universidad de los Andes)

  • Ruiz, Juanita

    (Inter-American Development Bank)

Abstract

We estimate the effects of drug-related violence on individual labor market outcomes in a transit country. Transit countries do not have enough market power to determine the global supply or demand of drugs yet must deal with the consequences from drug trafficking activities. We implement a Bartik-type instrumental variables strategy which assumes that violence in Honduran municipalities located along drug transport routes changes when coca production in Colombia grows or contracts. Our results show that drug-related violence has negative effects on extensive and intensive margin labor market outcomes for transit country workers and has greater effects on women than men.

Suggested Citation

  • 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).
    • Handle: RePEc:iza:izadps:dp17126
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    References listed on IDEAS

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    More about this item

    Keywords

    drug markets; violence; labor market outcomes; gender inequality; instrumental variables;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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