Terrorism and municipality size in Colombia

This paper examines the persistence of the demographic effects of terrorism on Colombian municipalities between 1985 and 2020. To this end, we propose implementing difference-in-differences estimation techniques that account for heterogeneous effects across units and over time. Our results first highlight the importance of conditioning on covariates to ensure the reliability of the parallel trends assumption in this context. Contrary to previous related studies, we find that terrorist incidents have had lasting adverse effects. Specifically, municipalities that experienced an attack exhibit a 9.3% lower growth over a 10–year period compared to those that were not attacked. Additionally, we show that terrorism exerts its influence through the extensive rather than the intensive margin.