Employment Of Displaced And Non-Displaced Households In Luhansk And Donetsk Oblasti

This essay investigates the employment of displaced and non-displaced households in a region next to the conflict zone. We show that the casually observed average 0–5% difference in employment between displaced and non-displaced household heads conceals positive selection into displacement. Relative to locals, internally displaced persons are positively selected based on observable as well as unobservable factors. After controlling for personal characteristics, the structure of the household, location, non-labour incomes and endogeneity of displacement, heads of IDP households are still 20% less likely to be employed two years after resettlement.