Mexican violence displaces people, discourages international migration, and shrinks highway network connections

Abstract: This paper estimates the impact of violence on domestic and international migration in Mexico during 2005-2020. Unlike earlier studies, we use network analysis to quantify changes in the degree of interconnectedness among all municipalities in Mexico and with the US, breaking it down by origin-destination pairs. To identify the impact of violence on the changes of the migration network, we use instrumental variables. We exploit the exogenous variation in heroin street prices in the US, local prices of corn in Mexico, and differences in which regions received more Chinese immigrant communities during the 1930s, members of which introduced opium cultivation and drug smuggling networks in Mexico. These instruments help us identify the areas with a current presence of drug trafficking organizations and facing increases in violence. We show that municipalities that experience rises in homicide rates continue to attract immigrants within the country, but they face a larger rise in domestic emigration. The violence also discourages the return migration of Mexicans from the US and non-transit international emigration. Consistent with our findings, areas affected by violence also experience a long-term reduction in vehicle trips made in the highway network connecting them with the rest of the country.