Zusammenfassung:
This paper examines the effects of exposure to hard-security counter-insurgency operations during school-age years on human capital and labour market outcomes in India. We exploit the 1989 introduction of the Greyhounds-a specialized commando force created to combat Naxalite insurgents-in Andhra Pradesh (AP), as a natural experiment. Of all the states affected by Naxalite violence, only AP raised such a police force at the time. We compare outcomes of school-age cohorts in AP with older cohorts, and contrast these patterns with those in other affected states. Intent-to-treat estimates suggest that exposure to the policy during school-age years led to increased educational attainment and, in adulthood, better labour market outcomes and improved socio-economic status. These effects appear to be driven by increased household investment in education due to reduced uncertainty stemming from improved security. Our findings highlight the economic returns to peace and stability in conflict-affected regions.