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Self-employment and Conflict in Colombia

Author

Listed:
  • Carlos Bozzoli
  • Tilman Brück
  • Nina Wald

Abstract

Many Colombians are confronted with the ongoing conflict that influences their decision making in everyday life, including their behavior in labor markets. This study focuses on the impact of violent conflict on self-employment, enlarging the usual determinants with a set of conflict variables. Our estimation strategy compares three different estimates: one from fixed-effects panel data (OLS-FE), estimates using lagged conflict indicators instead of contemporaneous regressors, and instrumental variables (IV-FE) estimates. Our results show that a one standard deviation increase in net displacement rates increases the rate of self-employment by about 7 percent points. Dividing the self-employed into different sectors (services and agriculture), we find that net displacement increases self-employment in the services sector but has no effect in agriculture that is affected by attacks by rebel and paramilitary groups, instead. Looking at the income of self-employed individuals, an influx of displaced reduces sharply hourly income in the self-employment sector.

Suggested Citation

  • Carlos Bozzoli & Tilman Brück & Nina Wald, 2013. "Self-employment and Conflict in Colombia," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(1), pages 117-142, February.
  • Handle: RePEc:sae:jocore:v:57:y:2013:i:1:p:117-142
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    References listed on IDEAS

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    1. Camilo Mondragón-Vélez & Ximena Peña, 2010. "Business Ownership and Self-Employment in Developing Economies: The Colombian Case," NBER Chapters,in: International Differences in Entrepreneurship, pages 89-127 National Bureau of Economic Research, Inc.
    2. Demirguc-Kunt, Asli & Klapper, Leora F. & Panos, Georgios A., 2009. "Entrepreneurship in post-conflict transition : the role of informality and access to finance," Policy Research Working Paper Series 4935, The World Bank.
    3. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2003. "Entrepreneurship Selection and Performance," Tinbergen Institute Discussion Papers 03-046/3, Tinbergen Institute, revised 24 Sep 2004.
    4. Sindy A. González & Héctor J. Villarreal, 2006. "More Pushed than Pulled: Self-employment in rural Mexico ten years after NAFTA," Working Papers 20063, Escuela de Graduados en Administración Pública y Políticas Públicas, Campus Monterrey, revised Nov 2006.
    5. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2005. "Entrepreneurship Selection and Performance: A Meta-Analysis of the Impact of Education in Developing Economies," World Bank Economic Review, World Bank Group, vol. 19(2), pages 225-261.
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    Citations

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    Cited by:

    1. Tony Addison & Rachel Gisselquist & Miguel Niño-Zarazúa & Saurabh Singhal, 2015. "Needs vs Expediency - Poverty Reduction and Social Development in Post-Conflict Countries," Working Papers id:7371, eSocialSciences.
    2. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    3. Ciarli, Tommaso & Kofol, Chiara & Menon, Carlo, 2015. "Business as unusual. An explanation of the increase of private economic activity in high-conflict areas in Afghanistan," LSE Research Online Documents on Economics 65015, London School of Economics and Political Science, LSE Library.
    4. Morales, Juan S., 2018. "The impact of internal displacement on destination communities: Evidence from the Colombian conflict," Journal of Development Economics, Elsevier, vol. 131(C), pages 132-150.
    5. Ana María Ibá-ez, 2014. "Growth in forced displacement: cross-country, sub-national and household evidence on potential determinants," Chapters,in: International Handbook on Migration and Economic Development, chapter 13, pages 350-387 Edward Elgar Publishing.
    6. Brück, Tilman & Llussá, Fernanda & Tavares, José, 2010. "Perceptions, Expectations, and Entrepreneurship: The Role of Extreme Events," IZA Discussion Papers 5351, Institute for the Study of Labor (IZA).
    7. Silvia Jarauta Bernal, 2011. "Beyond Coping. Risk Management in the West Bank," Research Working Papers 42, MICROCON - A Micro Level Analysis of Violent Conflict.
    8. Maren M. Michaelsen, 2012. "Mental Health and Labour Supply: Evidence from Mexico’s Ongoing Violent Conflicts," HiCN Working Papers 117, Households in Conflict Network.
    9. Ivlevs, Artjoms & Veliziotis, Michail, 2017. "Beyond Conflict: Long-Term Labour Market Integration of Internally Displaced Persons in Post-Socialist Countries," IZA Discussion Papers 11215, Institute for the Study of Labor (IZA).
    10. Brück, Tilman & Llussá, Fernanda & Tavares, José A., 2011. "Entrepreneurship: The role of extreme events," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 78-88.
    11. Brück, Tilman & Naudé, Wim & Verwimp, Philip, 2013. "Entrepreneurship and Violent Conflict in Developing Countries," WIDER Working Paper Series 028, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    self-employment; civil conflict; rural labor markets; Colombia;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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