The Impact of Conflict Displacement on Education and Labor Market Outcomes: The Case of Post-War Kosovo

Abstract

This paper uses the 1998-1999 Kosovo war and the following massive displacement of people as a natural experiment in order to estimate the impact of conflict displacement on labor market and education outcomes of Kosovars after they returned from exile. I exploit the interaction of the spatial variation in conflict intensity -as measured by casualties and bombings- and distance to the Albanian border as a source of exogenous variation in the displacement status. Results indicate that displaced Kosovar men are less likely to be employed in the agricultural sector and to work on their own account, while displaced Kosovar women are more likely to be inactive. Loss of assets (e.g. land, livestock) in an agrarian skill-based economy and also loss of social networks in an informal labor market might have further decreased the probability to find employment relative to stayers. However, shortly after the return home, the results also indicate that displaced Kosovar men and women are more likely to be working off-farm, especially in the construction and public administration sectors, which indicates a relatively quick recovery. In addition, displaced Kosovar girls are more likely to be enrolled in primary school, but I find no effect on education for boys. The refugee camp experience might have provided better conditions to young Kosovar girls compared to the the precarious pre-war ``parallel education system.