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We examine the impact of conflict-driven displacement on human capital looking at the Mozambican civil war (1977 - 1992), during which more than four million civilians fled to the countryside, to cities, and to refugee camps and settlements in neighboring countries.
First, we present descriptive patterns linking education and sectoral employment to the various displacement trajectories using the full population census. Second, we compare siblings separated during the war, using those who stayed behind as a counterfactual to one's displacement path. Displacement is associated with increased educational investments, with the largest effects experienced by rural-born children escaping to urban areas.
Third, we jointly estimate place-based and uprootedness effects. Both are present, with displacement increasing education and decreasing attachment to agriculture by the same rate as being exposed to an environment approximately one standard deviation more developed than one's birthplace.
Fourth, we conduct a survey in Mozambique's largest Northern city, whose population doubled during the civil war. Those displaced to the city have significantly higher education than their siblings who remained in the countryside and they converged to the levels of schooling of non-mover urban born individuals. However, those displaced exhibit significantly lower social/civic capital and have worse mental health, even three decades after the war ended.
These findings reveal that displacement shocks can trigger human capital investments, breaking links with subsistence agriculture, but at the cost of long lasting, social, and psychological traumas.