NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Building Peace: The Impact of Aid on the Labor Market for Insurgents

Radha Iyengar, Jonathan Monten, Matthew Hanson

NBER Working Paper No. 17297
Issued in August 2011
NBER Program(s):   LS

Employment growth could reduce violence during civil conflicts. To determine if increased employment affects violence we analyzed varying employment in development programs run by different US military divisions in Iraqi districts. Employment levels vary with funding periods and the military division in charge. Controlling for variability between districts, we find that a 10% increase in labor-related spending generates a 15-20% decline in labor-intensive insurgent violence. Overall the 10% spending increase is associated with a nearly 10% violence reduction, due to reduction in attacks which kill civilians, but increased attacks against the military. These findings indicate that labor-intensive development programs can reduce violence during insurgencies.

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Document Object Identifier (DOI): 10.3386/w17297

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