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Self-employment and Conflict in Colombia

  • Carlos Bozzoli

    (German Institute for Economic Research (DIW Berlin), Berlin, Germany
    Households in Conflict Network (HiCN), Berlin, Germany)

  • Tilman Brück

    (German Institute for Economic Research (DIW Berlin), Berlin, Germany
    Households in Conflict Network (HiCN), Berlin, Germany)

  • Nina Wald

    ()

    (German Institute for Economic Research (DIW Berlin), Berlin, Germany
    Households in Conflict Network (HiCN), Berlin, Germany)

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.

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File URL: http://jcr.sagepub.com/content/57/1/117.abstract
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Article provided by Peace Science Society (International) in its journal Journal of Conflict Resolution.

Volume (Year): 57 (2013)
Issue (Month): 1 (February)
Pages: 117-142

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Handle: RePEc:sae:jocore:v:57:y:2013:i:1:p:117-142
Contact details of provider: Web page: http://pss.la.psu.edu/

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  1. Ximena Peña Parga & Camilo Mondragón-Vélez, 2008. "Business Ownership and Self-Employment in Developing Economies: The Colombian Case," DOCUMENTOS CEDE 004672, UNIVERSIDAD DE LOS ANDES-CEDE.
  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. 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.
  4. repec:dgr:uvatin:20030046 is not listed on IDEAS
  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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