Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273667 
Year of Publication: 
2022
Series/Report no.: 
Working Papers No. 2022-11
Publisher: 
Banco de México, Ciudad de México
Abstract: 
This document studies the effect of the homicide rate on internal migration in Mexico. Reduced form evidence shows that net migration of skilled workers decreases into local labor markets where homicide rates increased after 2007, suggesting workers prefer destinations with lower homicide rates. This result is due to lower inflows, without effects on outflows, pointing to the existence of moving costs. To quantify the welfare cost of increasing homicides, we use workers' migration decisions and a spatial equilibrium model. Skilled workers' average willingness to pay to decrease the homicide rate by 1% is estimated at 0.58% of wages. The welfare cost is in the order of several points of GDP per year, depending on the assumptions. Workers who do not migrate bear the largest share of the overall welfare cost.
Subjects: 
Internal Migration
Homicide Rates
Instrumental Variables
Structural Estimation
JEL: 
K42
O15
Document Type: 
Working Paper
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