Labor Market Consequences of Homicides: Evidence from Mexico
IMF Working Papers, May 23, 2025
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- Labor Market Consequences of Homicides: Evidence from Mexico
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Bibliographic details
- Authors: Lorenzo Aldeco Leo, Matteo Ghilardi, Hugo Tuesta
- Published: May 23, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229009027.001
Core findings
- Using detailed survey data and an individual-fixed effect estimation, the analysis reveals distinct gender dynamics in response to rising homicide rates.
- Men are more likely to exit the labor market due to reduced demand for their labor.
- Women increasingly join the workforce, mainly in the informal sector, to offset the decline in male labor supply.
- The gendered outcome is largely driven by the presence of drug trafficking organizations, which primarily employ men in their operations.
- Escalating violence increases labor mobility, leading to higher job separations, particularly among women seeking safer employment.
- While increasing crime in the form of homicides may not induce large changes in the aggregate level of employment, there is evidence of labor reallocation across and within sectors.
- The observed dynamics suggest an increase in labor market misallocation.
Methodology and data
- Estimation approach: individual-fixed effect estimation.
- Data sources: detailed survey data (as described in the paper).
Gender dynamics and mechanisms
- Men: higher probability of exiting the labor market driven by reduced labor demand, partly due to male employment in drug trafficking organizations.
- Women: higher labor force entry, concentrated in the informal sector, acting as a compensatory response to men's labor market exits.
- Job separations: increased overall, with particularly pronounced separations among women seeking safer employment.
Labor mobility and allocation effects
- Escalating homicide rates lead to increased labor mobility.
- Evidence points to labor reallocation across sectors and within sectors rather than large aggregate employment declines.
- Consequence: increased labor market misallocation.
Publication and metadata
- Authors: Lorenzo Aldeco Leo, Matteo Ghilardi, Hugo Tuesta
- Date: May 23, 2025
- Series: IMF Working Papers, Working Paper No. 2025/100
- Volume: 2025
- Issue: 100
- Pages: 23
- DOI: https://doi.org/10.5089/9798229009027.001
- ISBN: 9798229009027
- ISSN: 1018-5941
- Subjects: Crime, Employment, Labor, Labor force participation, Labor markets, Labor supply
- Keywords: Crime, Employment, evidence from Mexico, Gender, homicide rate, homicides increase, job separation, Labor force participation, labor market consequence, labor market effect, Labor Markets, Labor supply, Mexico
IMF Working Paper — Labor Market Consequences of Homicides: Evidence from Mexico
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