The Long-Run Labor-Market Consequences of Civil War: Evidence from the Shining Path in Peru

52 Pages Posted: 6 Jul 2010

See all articles by José Galdo

José Galdo

Syracuse University - Department of Economics; IZA Bonn

Abstract

This study exploits district-level variation in the timing and intensity of civil war violence to investigate whether early-life exposure to civil wars affects labor-market outcomes later in life. In particular, we examine the impacts of armed conflict in Peru, a country that experienced the actions of a tenacious, brutally effective war machine, the Shining Path, between 1980 and 1995. This study finds that the most sensitive period to early-life exposure to civil war violence is the first 36 months of life. A one standard deviation increase in civil war exposure leads to a four percent fall in adult monthly earnings. Neither fetal, nor pre-school, periods significantly affect long-run earnings. Substantial heterogeneity in the earnings impacts emerge when considering variation in the types of civil war violence. Sexual violations disproportionally affected the wages of women, while torture and forced disappearances disproportionally affected the wages of men. Evidence on intervening pathways suggests that health rather than schooling is the most important channel in connecting early-life exposure to civil war and adult earnings.

Keywords: civil war, earnings, measurement error, instrumental variable approach, Shining Path

JEL Classification: I12, J13, O12, O15

Suggested Citation

Galdo, José, The Long-Run Labor-Market Consequences of Civil War: Evidence from the Shining Path in Peru. IZA Discussion Paper No. 5028, Available at SSRN: https://ssrn.com/abstract=1634495 or http://dx.doi.org/10.2139/ssrn.1634495

José Galdo (Contact Author)

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States

IZA Bonn

P.O. Box 7240
Bonn, D-53072
Germany

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