Research (PhD thesis)

Conflict, Road Insecurity and Self-Employed Shopkeepers in Rural Peru

This paper examines how violent conflict affects the occupation decision of the affected population. It proposes road insecurity as a channel of conflict transmission on the decision to work as a self-employed shopkeeper or street vendor. In a conflict situation, the risk of assaults on roads increases the cost of transporting goods. I capture road insecurity using an interaction term between distance to the next market and a conflict variable. The impact of distance to the next market on the probability of opening a shop is expected to be more negative in conflict than in non-conflict districts. I test this prediction in the context of the Peruvian armed internal conflict, which was initiated by the insurgent group Sendero Luminoso (Shining Path) in 1980. Using a logit model, I find that the probability of working as a shopkeeper or vendor decreases with distance to the next market in conflict districts. This result is robust to the inclusion of different sets of control variables capturing other decisive factors in the self-employment decision, such as education, access to capital, migration, and alternative labor market opportunities. Robustness checks show that the negative effect of distance to market on working as a vendor in conflict districts is neither driven by unobserved similarities of the districts around Ayacucho nor by a more general effect of the conflict on self-employment.

PhD thesis in progress
Julia Seiermann
PhD Student
Julia Seiermann