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Economics of National Security

Paper Session

Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)

Manchester Grand Hyatt, Gaslamp AB
Hosted By: Economics of National Security Association
  • Chair: Eli Berman, University of California-San Diego

Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia

Gaurav Khanna
,
University of California-San Diego
Carlos Medina
,
Central Bank of Colombia
Anant Nyshadham
,
Boston College and NBER
Jorge Tamayo
,
Harvard Business School

Abstract

Canonical models of criminal behavior highlight the importance of economic incentives and employment opportunities in determining participation in crime (Becker, 1968). Yet, deriving causal corroborating evidence from individual-level variation in employment incentives has proven challenging. We link rich administrative micro-data on socioeconomic measures of individuals with the universe of criminal arrests in Medellin over a decade. We test whether increasing the relative costs to formal-sector employment led to more crime. We exploit exogenous variation in formal employment around a socioeconomic score cutoff, below which individuals receive generous health benefits if not formally employed. Our regression discontinuity estimates show that this popular policy induced a fall in formal-sector employment, and a corresponding spike in organized crime. This relationship is stronger in neighborhoods with more opportunities for organized crime. There are no effects on less economically motivated crimes like those of impulse or opportunity, allowing us to rule out alternative mechanisms.

How Do Firms Respond to Insecurity? Evidence from Afghan Phone Records

Joshua Blumenstock
,
University of California-Berkeley
Tarek Ghani
,
Washington University-St. Louis
Sylvan Herskowitz
,
International Food Policy Research Institute
Thomas Scherer
,
University of California-San Diego
Ott Toomet
,
University of Washington

Abstract

We provide new evidence on how insecurity affects firm behavior by linking data on violent conflict in Afghanistan to geo-stamped corporate mobile phone records. We begin by developing a method for observing firm location choice with phone data, and validate these measurements using independent sources of administrative and survey data. Next, we show that deadly terrorist attacks reduce the presence of firms in targeted districts by 4-6%. The effect includes both an increase in the local exit of existing firms following attacks and a decrease in new rm entry. We find large negative spillovers from attacks in provincial capitals on firm presence in nearby rural districts. After violence, employees in provincial capitals are 33% more likely to move to Kabul and 15% more likely to leave for another province.

Innocent until Stereotyped Guilty? Terrorism and United States Immigration Court Decisions

Justice Tei Mensah
,
Swedish University of Agricultural Sciences
Kweku Opoku-Agyemang
,
Center for Effective Global Action, UC Berkeley

Abstract

We investigate the impact of terrorist attacks on court decisions made by US immigration judges. We exploit quasi-random variations in the timing of attacks and immigration court hearings, and the random variations in the success or failure of US-based terrorist attacks, finding a significant negative effect of terrorism on asylum approvals. Our results suggest that immigration court judges stereotype asylumseekers as potential terrorists. Such stereotypes seem unique to asylum applicants, as parole approvals do not significantly change after attacks. Applicants from predominantly Muslim, Middle-Eastern and North African countries are disproportionately denied after successful terrorist attacks in the US.

Did the War on Terror Ignite a Veteran Opioid Epidemic?

Resul Cesur
,
University of Connecticut, NBER and IZA
Joseph Sabia
,
San Diego State University and University of New Hampshire
W. David Bradford
,
University of Georgia

Abstract

Military veterans are at ground zero of the U.S. opioid epidemic, facing an overdose rate twice that of civilians. Post-9/11 deployments to Afghanistan and Iraq have exposed servicemembers to injury-related chronic pain, psychological trauma, and cheap opium, all of which may fuel opioid addiction. This study is the first to estimate the impact of military deployments in the Global War on Terrorism on opioid abuse. We exploit a natural experiment in overseas deployment assignments and find that combat service substantially increased the risk of prescription painkiller abuse and illicit heroin use among active duty servicemen. War-related physical injuries, death-related battlefield trauma, and Post-Traumatic Stress Disorder emerge as important mechanisms. The magnitudes of our estimates imply lower bound combat-induced health care costs of $1.2 to $1.7 billion per year for prescription painkiller abuse and $800 million per year for heroin use.
JEL Classifications
  • H0 - General
  • F5 - International Relations, National Security, and International Political Economy