The effects of crime on the labour market: Evidence from Mexico


Published 14.07.21
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Rising violence in Mexico City led workers, especially women, to reduce hours and leave the labour force

Audio file

Read “The economic burden of crime: Evidence from Mexico” by Andrea Velásquez here.

Exposure to violence can have significant economic impacts through their effects of individual behaviour. In this VoxDevTalk, Andrea Velásquez 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 labour market outcomes. Using a longitudinal dataset to track individuals over years of rising and waning violence, Velásquez tracks how individual actors modify their labour force participation following exposure to violence. 

She finds that exposure to violence reduces labour 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 labour 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.