Working Paper: NBER ID: w20463
Authors: Andrs Moya; Michael Carter
Abstract: We explore the impact of violence on perceived prospects of upward mobility. For a sample of victims of violence in Colombia, we bring together data on expected upward mobility, exposure to violence, and symptoms of psychological trauma. After controlling for material losses and current circumstances, we find that exposure to more severe violence leads victims’ perceived prospects of upward mobility to become increasingly hopeless. The estimated impacts are large: victims exposed to more severe violence expect that the likelihood of being in extreme poverty in the long-run is more than two times as high than those exposed to less severe violence. Additional evidence indicates that depression and psychological trauma mediate this result, identifying a channel by which these pessimistic expectations can become self-confirming. Together, these findings suggest the existence of a psychological poverty trap and the need to rethink strategies to assist the economic recovery of the victims of violence.
Keywords: violence; psychological trauma; hope; poverty; colombia
JEL Codes: D03; D84; O12; I1; I3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exposure to more severe violence (I24) | Diminished prospects of upward mobility (J62) |
| Psychological trauma (symptoms of depression) (E71) | Diminished prospects of upward mobility (J62) |
| Exposure to more severe violence (I24) | Psychological trauma (symptoms of depression) (E71) |
| Exposure to more severe violence (I24) | Increased likelihood of being in extreme poverty (I32) |
| Diminished prospects of upward mobility (J62) | Psychological poverty trap (I32) |