Schooling and Labour Market Outcomes in Post-War Iraq

Armed conflict can have long lasting effects not just through direct casualties and physical destruction but also through a collapse of investment, displacement of people and behavioural responses of survivors. Understanding these economic costs is necessary for governments and non-governmental organisations to devise effective policies and mechanisms to foster recovery and growth in war-affected areas. This is an important topic as one of the biggest global challenges now is the seemingly endless military conflict in the Middle East. This aim of this research is to study the economic consequences of the Iraq War of 2003-2011 in terms of its effect on educational attainment and employment behaviour of young adults. The Iraq war, which lasted for almost a decade, has affected numerous cohorts of school-age children. Since the youth comprise the largest segment of Iraqi society (UN NHDR, 2014), they are key to the country's future economic growth. An important aspect of this study is to examine the impact of war on schooling and labour decisions, and how they might differ by gender. Education decisions are made by comparing the costs and the future life-long returns (in term of wages but also non-financial) of education. Conflicts are likely to increase the immediate costs of education and the expected returns of any investment by reducing life expectancy. However, they might also improve future outcomes. One reason is that by reducing future labour supply (through death, disability or displacement), wars might increase the expected wages of survivors. As such, the effect of conflict on education is a priori unclear. Indeed, the empirical evidence so far is mixed and appear gender dependent (Shemyakina, 2011, Akresh and de Walque, 2008). Regarding labour market outcomes, Acemoglu et al. (2004) find that during World War II, female labour supply increased in states with higher male mobilization rates, demonstrating what is known as the "added worker effect", and permanently affected the wage structure in the United States. A similar effect was found for African American workers after the Second World War (Ferrara, 2019). Given that cultural norms in Iraq are different from the US and Western Europe, an increase in female employment during the war might change the popular perceptions and thus be beneficial for Iraqi women in the future. 4 / 21 I aim to show how conflict affected education and labour market decisions in the post-war area, and whether the effects differ by gender. For this, I will rely on regional differences in conflict intensity and over time. To create a detailed geographic data on conflict in Iraq including time-varying measure of war intensity, I will use the Iraq Geo-Referenced WITS Data from the Empirical Studies of Conflict. This data analyses micro-level conflict information and geo-references each incident, thus allowing to define the intensity of conflict for each area. Individual-level schooling and employment information comes from the Iraq Household Socio-economic Survey, which also includes detailed family background, consumption data, etc. The identification strategy in this project will rely on the differences in conflict intensity over time and by location. I plan to use two strategies. First, a quasi-experimental design, where the most affected postwar cohorts are defined as the treatment group and the less affected as the control. A comparison of outcome over time and between treated and control provides an estimate of the impact of the war. Alternatively, since the intensity of casualties might be correlated with unobserved district factors affecting both years of schooling and war intensity, I plan to use a synthetic control method.