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Research ArticleArticle

The Economic Burden of Crime

Evidence from Mexico

Andrea Velásquez
Journal of Human Resources, October 2020, 55 (4) 1287-1318; DOI: https://doi.org/10.3368/jhr.55.4.0716-8072R2
Andrea Velásquez
Andrea Velásquez is an Assistant Professor of economics at the University of Colorado Denver
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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.

JEL Classification
  • J16
  • J22
  • K42
  • N36
  • Received July 2016.
  • Accepted November 2018.
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Journal of Human Resources: 55 (4)
Journal of Human Resources
Vol. 55, Issue 4
2 Oct 2020
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The Economic Burden of Crime
Andrea Velásquez
Journal of Human Resources Oct 2020, 55 (4) 1287-1318; DOI: 10.3368/jhr.55.4.0716-8072R2

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The Economic Burden of Crime
Andrea Velásquez
Journal of Human Resources Oct 2020, 55 (4) 1287-1318; DOI: 10.3368/jhr.55.4.0716-8072R2
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  • Article
    • Abstract
    • I. Introduction
    • II. Background
    • III. Economic Effects of Crime and Violence
    • IV. Data: Mexican Family Life Survey
    • V. Empirical Strategy
    • VI. Results
    • VII. Threats to Identification and Robustness Checks
    • VIII. Conclusion
    • Footnotes
    • References
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Keywords

  • J16
  • J22
  • K42
  • N36
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