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The Economic Consequences of Forced Displacement

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  • Nathan Fiala

    () (German Institute for Economic Research)

Abstract

Currently, nearly 44 million people around the world are forcibly displaced. This displacement is due to a number of factors, including weather shocks in New Orleans and Indonesia and conflict in Afghanistan and Libya. Researchers have posited that the effect of this movement has led to severe impacts on the populations, but due to estimation and data difficulties, little is known about the causal impact of this movement on livelihoods. This paper presents the first causal evidence of the effect of displacement. A panel data set on households and communities near a conflict zone in northern Uganda offers the opportunity to exploit a discontinuity design in order to minimize endogenous determinants of displacement and obtain plausibly unbiased estimates of the immediate and postdisplacement impact of displacement on civilians. I find that displaced households experienced an initial decrease in consumption of between 28% and 35%, as well as a 1/2 standard deviation decrease in the value of assets compared to nondisplaced households. Two years after households returned home, displaced households still lag behind nondisplaced households with 20% lower consumption, and a 1/5 standard deviation less assets. However, as predicted by a heterogeneous neoclassical growth model, displaced households in the top three quartiles of predisplacement assets appear to have recovered a portion of their consumption, though with significantly reduced education and wealth levels. There is no recovery for the bottom quartile households, who appear to be trapped in a lower equilibrium.

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  • Nathan Fiala, 2012. "The Economic Consequences of Forced Displacement," HiCN Working Papers 137, Households in Conflict Network.
  • Handle: RePEc:hic:wpaper:137
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Conflicts and Economic Development
      by Dany Jaimovich - Bakary Baludin in Development Therapy on 2013-03-04 20:32:00
    2. A socio-economic characterization of returnee households in the Nuba Mountains
      by Dany Jaimovich - Bakary Baludin in Development Therapy on 2013-03-15 21:32:00

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    Cited by:

    1. Bauer, Thomas K. & Giesecke, Matthias & Janisch, Laura, 2017. "Forced Migration and Mortality," IZA Discussion Papers 11116, Institute of Labor Economics (IZA).
    2. Loaiza Quintero, Osmar Leandro & Muñetón Santa, Guberney & Vanegas, Juan Gabriel, 2018. "Forced displacement and Multidimensional Poverty in Antioquia, Colombia: an assessment by means of a Seemingly Unrelated Regression," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 41, pages 167-190.
    3. Carlos Bozzoli & Tilman Brück & Tony Muhumuza, 2012. "Movers or Stayers? Understanding the Drivers of IDP Camp Decongestion during Post-Conflict Recovery in Uganda," Discussion Papers of DIW Berlin 1197, DIW Berlin, German Institute for Economic Research.
    4. Braun, Sebastian & Dwenger, Nadja, 2017. "The local environment shapes refugee integration: Evidence from post-war Germany," Hohenheim Discussion Papers in Business, Economics and Social Sciences 10-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    5. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "Seeds of distrust: conflict in Uganda," Journal of Economic Growth, Springer, vol. 18(3), pages 217-252, September.
    6. Wang, Shun & Zhou, Weina, 2017. "The Unintended Long-Term Consequences of Mao’s Mass Send-Down Movement: Marriage, Social Network, and Happiness," World Development, Elsevier, vol. 90(C), pages 344-359.
    7. Ivan Zilic, 2018. "Effect of forced displacement on health," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 181(3), pages 889-906, June.
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    9. Burzynski, Michal & de Melo, Jaime & Deuster, Christoph & Docquier, Frédéric, 2019. "Climate Change, Inequality, and Human Migration," CEPR Discussion Papers 13997, C.E.P.R. Discussion Papers.
    10. Hoenig, Tillman, 2018. "The Effect of Conflict on Education: Evidence from Sierra Leone," MPRA Paper 85064, University Library of Munich, Germany.
    11. 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 of Labor Economics (IZA).
    12. Thomas K. Bauer & Matthias Giesecke & Laura M. Janisch, 2019. "The Impact of Forced Migration on Mortality: Evidence From German Pension Insurance Records," Demography, Springer;Population Association of America (PAA), vol. 56(1), pages 25-47, February.
    13. Sarah Bridges & Douglas Scott, 2019. "Early childhood health during conflict: The legacy of the Lord’s Resistance Army in Northern Uganda," Discussion Papers 2019-11, University of Nottingham, CREDIT.
    14. Asha Abdel-Rahim & Dany Jaimovich & Aleksi Ylönen, 2018. "Forced displacement and behavioral change: an empirical study of returnee households in the Nuba Mountains," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(2), pages 190-220, February.
    15. O’Reilly, Colin, 2015. "Household Recovery from Internal Displacement in Northern Uganda," World Development, Elsevier, vol. 76(C), pages 203-215.
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    17. repec:jku:cdlwps:2015_08 is not listed on IDEAS

    More about this item

    Keywords

    Forced displacement; Economic development; Consequences of displacement;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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