Creating Jobs in South Asia’s Conflict Zones

This paper describes the key challenges
to job creation in conflict-affected environments in South
Asia. It uses household survey data since the early 2000s
for Afghanistan, India, Nepal, and Sri Lanka to document the
characteristics of labor markets in conflict-affected areas,
exploiting the spatial and time variation in armed conflict
within countries. The analysis finds that, across countries,
labor markets look very different in conflict-affected areas
when compared with non-conflict or low-conflict areas.
Employment rates are higher in large part because women
participate more in the labor market, but work tends to be
more vulnerable, with more self-employment and unpaid family
work. The authors show that these differences often pre-date
the conflict but are also exacerbated by it. They also
examine the constraints on the private sector activity in
such areas, using firm surveys when possible. Finally, the
paper reviews the existing literature and the policy
experiences of several countries to draw some policy
implications for job creation efforts in the
conflict-affected areas of South Asia. It particularly
highlights the role of the private sector and community
initiatives, in conjunction with public policies, to improve
the environment for successful job creation.