Andrea Velásquez Explains the Negative Impact of Violence on Labor Markets

Exposure to violence can have significant economic impacts through their effects of individual behavior. In this VoxDevTalk, Andrea Velásquez, Assistant Professor of Economics, discusses her recent work leveraging a unique set of data to explore how waves of rising violence in Mexico City affect men’s and women’s labor market outcomes. Using a longitudinal dataset to track individuals over years of rising and waning violence, Velásquez tracks how individual actors modify their labor force participation following exposure to violence.  She finds that exposure to violence reduces labor market outcomes in the form of reduced earnings and productivity, particularly for self-employed workers. More importantly, the effect is larger among women, who become more likely to reduce working hours or leave the labor force altogether. These results highlight that policy responses to violence should take into account the negative wealth shocks imposed on civilians, and to women in particular.