Tuesday, September 29, 2020

Gangs, Labor Mobility and Developments

May yo seasons belong with endless green streets and permanent summer legs.

— “haiku (for mungu and morani and the children of soweto)” By Sonia Sanchez

What is the marginal cost curve like for gravediggers?

 66% herd immunity in the Brazilian Amazon?

An Uber-like service for hiring an eviction crew

Jonathan Dancy on Parfit

MIE: discontinued photographic film

Matt Y. on the Biden economic team

Gangs, Labor Mobility and Development

We study how two of the world’s largest gangs—MS-13 and 18th Street—affect economic development in El Salvador. We exploit the fact that the emergence of these gangs was the consequence of an exogenous shift in American immigration policy that led to the deportation of gang leaders from the United States to El Salvador. Using a spatial regression discontinuity design, we find that individuals living under gang control have significantly less education, material wellbeing, and income than individuals living only 50 meters away but outside of gang territory. None of these discontinuities existed before the emergence of the gangs. The results are confirmed by a difference-in-differences analysis: after the gangs’ arrival, locations under their control started experiencing lower growth in nighttime light density compared to areas without gang presence. A key mechanism behind the results is that, in order to maintain territorial control, gangs restrict individuals’ freedom of movement, affecting their labor market options. The results are not determined by exposure to violence or selective migration from gang locations. We also find no differences in public goods provision.

That is from a new NBER working paper by Nikita Melnikov, Carlos Schmidt-Padilla, and Maria Micaela Sviatschi.