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Conflict-induced displacement and labour market outcomes: evidence from post-war Bosnia and Herzegovina

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  • Florence Kondylis
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    Abstract

    This study uses a longitudinal data source to study the effects of conflict-induced displacement on labour market outcomes for Bosnians in post-war Bosnia and Herzegovina. To account for endogeneity in the displacement status, I exploit the fact that the level of violence in the pre-war residence likely affected the displacement decision for Bosnians and yet is not associated to economic performance. I find evidence of positive selection into displacement, i.e. more "able" individuals in terms of labour market outcomes are more likely to be displaced, and that displaced Bosnians men and women are less likely to be in work relative to stayers. Interestingly, whereas this translates into higher unemployment for men, it decreases women's participation with no effect on unemployment once selection is accounted for. The informality of the labour market in BiH and the destruction of networks are not only the most plausible candidates to explain the high cost of displacement in terms of labour market outcomes, but they also help rationalise the lack of an effect on participation for displaced men. However, differences in selection suggest that the experience of war was highly contrasted along gender lines and that sociological and cultural factors may also play a significant role.

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    File URL: http://eprints.lse.ac.uk/19670/
    File Function: Open access version.
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    Bibliographic Info

    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 19670.

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    Length: 50 pages
    Date of creation: Nov 2007
    Date of revision:
    Handle: RePEc:ehl:lserod:19670

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    Related research

    Keywords: civil conflict; labour market; migration; panel data;

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    1. Florence Kondylis, 2005. "Agricultural Returns and Conflict: Quasi-Experimental Evidence from a Policy Intervention Programme in Rwanda," CEP Discussion Papers dp0709, Centre for Economic Performance, LSE.
    2. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic enclaves and the economic success of immigrants - evidence from a natural experiment," Working Paper Series 2000:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Wahba, Jackline & Zenou, Yves, 2005. "Density, social networks and job search methods: Theory and application to Egypt," Journal of Development Economics, Elsevier, vol. 78(2), pages 443-473, December.
    4. Damm, Anna Piil, 2006. "Ethnic Enclaves and Immigrant Labour Market Outcomes: Quasi-Experimental Evidence," Working Papers 06-4, University of Aarhus, Aarhus School of Business, Department of Economics.
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    7. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
    8. Erica Field, 2002. "Entitled to Work: Urban Property Rights and Labor Supply in Peru," Working Papers 180, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    9. Blanchard, O.J. & Diamond, P., 1990. "Ranking, Unemployment Duration, And Wages," Working papers 546, Massachusetts Institute of Technology (MIT), Department of Economics.
    10. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
    11. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
    12. Jennifer Hunt, 1992. "The impact of the 1962 repatriates from Algeria on the French labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(3), pages 556-572, April.
    13. Deininger, Klaus, 2003. "Causes and consequences of civil strife - micro-level evidence from Uganda," Policy Research Working Paper Series 3045, The World Bank.
    14. Wei-Yin Hu, 2000. "Immigrant Earnings Assimilation: Estimates from Longitudinal Data," American Economic Review, American Economic Association, vol. 90(2), pages 368-372, May.
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