Seminario CEDE - Andrés Ham

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We examine the effects of drug-related violence on household choices in a transit country in the global cocaine trade. Using a shift-share instrumental variables strategy that interacts temporal variation in Colombian coca production with cross-sectional municipal connectivity in Honduras, we find heterogeneous impacts on men, women, and children. Rising homicide rates reduce male labor force participation, especially among self-employed and informal workers. For women, violence increases household work and lowers self-employment wages, reflecting a shift to low-productivity activities. For children, violence raises school attendance and reduces work, consistent with schooling as a protective response. These findings demonstrate that drug-related violence disrupts labor markets and reshapes time allocation within households, underscoring the broader consequences of drug-related violence in transit countries.