The (Non-) Effect of Violence on Education : Evidence from the 'War on Drugs' in Mexico

There is a growing interest in economic literature on the pervasive effects of violence exposure on human capital accumulation. However, this literature has come short on disentangling the direct effects of violence on individuals' schooling decisions from the indirect effects related to the destruction of infrastructure which inevitably accompanies armed conflict. In this paper we study the sharp increase in violence experienced in Mexico after 2006, known as “The War on Drugs” and its effects on human capital accumulation. This upsurge in violence is expected to have direct effects on individuals' schooling decisions but not indirect effects as severe destruction of infrastructure was absent. In addition, the fact that the marked increases in violence were concentrated in some municipalities (and not in others) allows us to implement a fixed effects methodology to study the effects of violence on education outcomes. Differently to several recent studies that have found significant negative effects of violence on economic outcomes in Mexico, we find evidence that this is not the case, at least in terms of human capital accumulation. By using several sources of data we show that at most very small effects on total enrollment exist. We also show that these small effects on enrollment may be driven by some students being displaced from high violence municipalities to low violence municipalities; but the education decisions of individuals do not seem to be highly impacted. We also discard the possibility that the effects on enrollment of young adults appear small due to a counteracting effect from ex-workers returning to school (i.e. we discard the possibility that crime reduced labor force participation, and those affected enrolled in school). These results stand in contrast with recent evidence of the negative effects of crime on short-term economic growth since minimal to null effects of violence on human capital accumulation today should have little to none adverse effects on long-term growth outcomes in Mexico