Economic Consequences of Forced Displacement

Abstract

Over 42 million people worldwide have been forcibly displaced from their communities, though little is known about the impact of this movement on livelihoods. I use a panel data set and exploit a geographic discontinuity to explore the effects of displacement in Uganda. I find that displaced households experience a significant initial decrease in consumption. Two years after households returned home, displaced households still lag behind. However, households in the top quartiles of pre-displacement assets have recovered some of their consumption, though with significantly reduced education and wealth levels. There is likely little or no recovery for the poorest households.

Disclosure statement

No potential conflict of interest was reported by the author.

Acknowledgements

I would like to thank Ambrose Olaa, former Community Development Officer of Kitgum, as well as a number of anonymous local leaders in Lira and Gulu for their help in understanding the history of displacement in northern Uganda. Further thanks go to my research staff Filder Aryemo, Oneka Johnson Brian, Cormac Mangan and Komakech Polykarp. Thanks as well to Christopher Blattman of Columbia University and Michelle Garfinkel, David Neumark and Stergios Skaperdas of the University of California, Irvine, for their input and advice. I also appreciate comments from participants at the Royal Economic Society and American Economic Association annual meetings. Funding for this research was provided in part from the European Community’s Seventh Framework Programme through its Marie Curie Initial Training Network programme. Any errors are entirely my own.

Notes

1. See also evidence on the negative impacts of conflict from Collier et al. (2003), De Walque (2006), Bundervoet, Verwimp, and Akresh (2009), Behrman (1988), Alderman, Hoddinott, and Kinsey (2006), Akresh and de Walque (2008), Barrett and Carter (2006), Jalan and Ravallion (2001), and Lokshin and Ravallion (2004).

2. Ghobarah, Huth, and Russett (2003) give an overview of these effects. Some micro studies that find poverty traps after conflict have ended include De Walque (2006) in Cambodia; Bundervoet et al. (2009) in Burundi; Alderman et al. (2006) in Zimbabwe; and Akresh and de Walque (2008) for Rwanda. Justino (2009) reviews theories.

3. Discontinuities in geography have been used extensively in education studies, most notably in Black (1999) and Bayer, Ferreira, and McMillan (2007) who look at school attendance boundaries on student outcomes, and Lavy (2006) who looks at effects of busing using adjacent neighbourhoods. Pence (2006) and Lalive (2008) have also used the design to identify mortgage and employment laws, respectively, using adjacent states.

4. A more detailed discussion of the labour market impacts of conflict can be found in Ibanez and Moya (2006), who examine the difficulty of using skills after a destruction of networks and of integrating into new environments.