The Economic Burden of Crime: Evidence from Mexico

Andrea Velasquez

Journal of Human Resources, 2020, vol. 55, issue 4, 1287-1318

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.

Date: 2020
Note: DOI: 10.3368/jhr.55.4.0716-8072R2
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:55:y:2020:i:4:p:1287-1318

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