This paper explores whether violence diminishes expectations about future socioeconomic mobility and discusses the implications of this possible behavioral effect for poverty dynamics. The analysis is based on microdata collected from a sample of IDPs in Colombia on: (a) the severity of the household’s experience of violence; (b) symptoms of psychological trauma; and (c) beliefs about socioeconomic mobility. After controlling for current socioeconomic circumstances and asset losses, the authors find:
- A more severe experience of violence leads victims to believe that there is a higher likelihood of being in extreme poverty. A one standard deviation increase in the number of violent events experienced by the household raises the perceived probability of extreme poverty in the following year by 54 percent relative to the mean. In the long run, the anticipated extreme poverty rate will be almost three times higher for victims at the top quartile of the distribution of the severity of violence than for those at the bottom quartile of the distribution.
- Beliefs of diminished prospects of economic mobility are consistent with a sense of hopelessness, i.e. an emotional state of despair and pessimism based on the expectation of negative outcomes and the perception of few pathways for progress and recovery. The behavioral effect is explained by the psychological consequences (depression, anxiety, post-traumatic stress disorder amongst others) of experiencing violence and forced displacement, which induce feelings of hopelessness.
The authors acknowledge that their analysis is limited by the small, non-representative sample and by lack of data to test whether victims’ beliefs map into actual behavior and economics transitions. Nevertheless, they conclude that psychological consequences of violence can create a behavioral poverty trap, akin to that which can result from the loss of conventional assets. Psychological constraints associated with the experience of violence can reinforce the effect of more discernible material constraints and lead victims to believe that there are even fewer prospects for socioeconomic mobility. This in turn affects economic behavior and hence poverty dynamics. The authors highlight the importance of rethinking strategies to promote the socioeconomic recovery of victims of violence.