Adjusting the Labour Supply to Mitigate Violent Shocks: Evidence from Rural Colombia

We study the use of labour markets to mitigate the impact of violent shocks on households in rural areas. Because the incidence of violent shocks is not exogenous, the analysis uses instrumental variables. As a response to violent shocks men decrease the time they devote to off-farm agricultural activities and increase off-farm non-agricultural activities, while women decrease their leisure time and increase the time they devote to household chores and childcare. Labour markets appear unable to fully absorb the additional labour supply. Policies in conflict-affected countries should aim to prevent labour markets from collapsing.

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