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This paper examines the effects of drug-related crimes on employment in Mexico at the state level during the period 2005–2014. Results indicate that such crimes have a negative impact on employment. We are able to decompose employment into low-skilled and high-skilled employment, and results are heterogeneous among both types of employment. Results...
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... The authors also mention that economic diversification is more intense in metropolitan areas, while in rural municipalities employment in service activities is more focused on personal and distribution services. Coronado and Saucedo (2018) examine the effects of drug-related crimes on employment in Mexico at the state level during the period 2005-2014. Results indicate that high-skilled employment is more sensitive to an increase in drug-related violence than low-skilled employment. ...
... In addition, a potential econometric problem might be the endogeneity of the crime rates. In this case, if error terms in equations (1) and (2) are not correlated along the panel and in time, then following Grossman (1982), Hanson's (2001) more recently Coronado and Saucedo (2018), the lagged value of the crime rate by locality in combination with other exogenous independent variables are used to build a valid instrument, as we discuss in the next section. ...
... To solve this issue, we followed a two-stage Instrumental Variable (IV) approach where we build a contemporary crime rate (kidnapping and homicide) instrument using its lagged value and the set of exogenous independent variables. Our selection of an instrument is consistent with other works, such as Grossman (1982), Hanson's (2001) and more recently Coronado and Saucedo (2018). ...
We study the effects of homicide and kidnapping rates on firms’ employment losses, identifying metropolitan and non-metropolitan localities in Mexico. We use a panel dataset for 32 sub-national states organized on a quarterly basis over the period 2011:Q1-2016:Q4, decomposed by locality population size and firm workforce size, including self-employment, micro, small, medium and large firms. Our results indicate that crime has a negative impact on employment across all localities but has a robust negative effect on employment in micro and small firms in metropolitan areas and non-metropolitan areas. An increase of one standard deviation (SD) in the homicide rate in each locality destroys 319,542 jobs countrywide, while an equivalent increase in kidnapping implies a loss of 560,705 jobs. On including in the analysis locality population size in the considered dimensions, this increase in homicide implies a reduction of 181,988 and 99,184 jobs in metropolitan and non-metropolitan areas, whereas for an equivalent increase in kidnapping the losses are 387,547 and 256,969 jobs, conditional on their respective model. Our results provide evidence of the heterogeneous damage of crime to employment, conditional on firm´s location and workforce size.
... It would also help if the United States could control the selling and trafficking of arms which cross southward the border. This is why some reports from the region and many Latin American presidents have called for reconsidering the current Economic impact of crime There is abundant research on the economic impact of crime (Balmori de la Miyar 2016) Most researchers have studied the impact of crime on economic growth and there is general agreement that it reduces growth(Bel and Holst 2018;Cárdenas and Rozo 2008;Detotto and Otranto 2010;Pan et al. 2012) There is also research on how crime affects labor productivity(Cabral et al. 2016) and employment(Coronado and Saucedo 2018) Economists have placed particular interest on the impact of crime on foreign direct investments(Ashby and Ramos 2013;Cabral et al. 2019) Some researchers mention their interest in studying the welfare cost of crime and violence, but they end up focusing on foregone income, monetary cost of crime, and people"s willingness to pay to avoid it(Jaitman 2015) The interest in studying the relationship between crime and variables related to economic growth clearly shows the predominance of the development-as-economic-growth paradigm. This chapter will focus on how crime relates to people"s experience of being well, which is an understudied area of research(Cohen 2008;Graham and Chaparro 2011;Hanslmaier 2013;Powdthavee 2005;Rojas 2017b;Staubli et al. 2014) 10.2 Crime and Well-Being10.2.1 Victimization in Latin AmericaRates of victimization are very high in Latin America; of course, there are many types of crime and their degree of violence as well as their expected impact on people"s well-being varies across types.Figure 10.3 presents general victimization rates based on the simple question asked in the World Value Survey: "Have you been the victim of a crime during the past year?" ...
Latin Americans are exposed to high levels of violence associated to gangs, organized crime and even domestic violence. It is shown that victimization impacts negatively on the well-being of Latin Americans and that its impact is very large in the case of women. Exposure to victimization is concentrated in particular areas of the region; however, fear of crime is widely spread in many Latin American countries and it also impacts negatively on well-being. It is also shown that domestic violence has a very large impact the well-being of women.
Resumen
El presente artículo examina el fenómeno del homicidio en Colombia y busca comprender las condiciones de vulnerabilidad que afectan al homicidio en las ciudades colombianas. A través de un enfoque teórico y metodológico basado en la vulnerabilidad se analizó dicha relación entre la violencia homicida con los mercados ilegales, los mercados laborales pauperizados y la repartición de la riqueza. La muestra se compuso de las treinta y dos ciudades capitales departamentales de Colombia. Se usaron herramientas estadísticas multivariadas (PLS-SEM) para analizar la relación entre estos factores y el homicidio. Los hallazgos sugieren que los bajos ingresos, la falta de empleo, la desigualdad y la violencia están asociados con un mayor riesgo de homicidio.
Worldwide, it is widely recognized that violent conflicts constrain economic growth and development. Thus, it is necessary to research and analyse the main causes of violence and their relationship with development. This paper analyses how violence has affected economic development in the Mexican context during the 2000–2015 period. It takes into account that in the last decade, this country has had increased levels of violence, especially since the ‘war on drugs’ against drug trafficking was promulgated in 2006. This study uses different econometric models that apply the assessments of the panel unit root and cointegration tests and panel cointegration estimation. The results indicate that the tests used to validate the data allow the panel data cointegration relationships to be calculated. They demonstrate the existence of a long-run relationship between violence and economic development. Specifically, the results take into account that gross domestic product per capita and public investments have inverse relationships with the homicide rate, whereas poverty, unemployment, illiteracy and the Gini index have direct relationships with the homicide rate. Moreover, violence is strongly related to the deterrence variables. The findings of this study demonstrate that drug trafficking explains the increased violence in Mexico. Thus, it is important to develop and formulate adequate policies to control this situation, take measures to control violence starting with its root causes and promote social and economic development with a strategy to strengthen legal activities in society.
This paper examines the convergence of energy consumption per capita (ECPC) in the 32 Mexican states from 2002 to 2017. Regardless of the recent Global Financial Crisis and Mexican Energy Reform, we first find evidence of a positive, increasing, and statistically significant spatial correlation of ECPC across states. Using cross-section and spatial dynamic econometric models, we document absolute and conditional β-convergence in ECPC during the pre-crisis, pre-Energy Reform, post-Energy Reform, and the whole study period. We report stable and larger convergence rates in spatial dynamic models, close to 20%, versus 3% without spatial effects. These figures suggest between-states relationships are crucial in Mexico. We also find an inverted U-shape relationship between ECPC and GDP per capita.
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