AbstractWe study the use of labour markets to mitigate the impact of violent shocks on households in rural areas. Because the incidence of violent shocks is not exogenous, the analysis uses instrumental variables. As a response to violent shocks men decrease the time they devote to off-farm agricultural activities and increase off-farm non-agricultural activities, while women decrease their leisure time and increase the time they devote to household chores and childcare. Labour markets appear unable to fully absorb the additional labour supply. Policies in conflict-affected countries should aim to prevent labour markets from collapsing. AcknowledgementsWe gratefully acknowledge funding from the World Bank, as well as generous funding from the Government of Norway. Two anonymous referees, Kristin Bergtora Sandvick, Patricia Justino, Nidhiya Menon, Eleonora Nillesen, Yana Rodgers, Philip Verwimp, and participants in the PRIO, World Bank, and AL CAPONE workshops provided valuable comments for the improvement of this paper. Any remaining mistakes in the paper are the authors' own.Notes1. Rural districts in Colombia are smaller administrative divisions within municipalities.2. The Online Appendix briefly describes the history of the current Colombian conflict.3. The rural districts are divided as follows: 57 in the Atlantic, 48 in the Central, 58 in the Coffee-growing, and 59 in the Southern Regions.4. These are the survey's projected numbers. However, because of oversampling, the actual sample sizes presented in the tables may differ slightly from these numbers.5. Previous research shows that forcibly displaced households worked mostly in the agricultural sector (57.3%) or were dedicated to household chores (12.8%). In addition, 55.5 per cent had access to land and worked on the farm. Illegal land seizure by armed groups was large: land abandoned or illegally seized by armed groups amounts to six million hectares (Ibáñez, Citation2008)).6. We define extended family as any family member other than the head of household, spouse, and the couple's offspring.7. Durable goods include refrigerators, laundry machines, blenders, microwave ovens, ovens, water heaters, air conditioners, televisions, radios, internet access, computers, bicycles, cars, and other properties (inclusive of housing). The index was calculated using the methodology of principal components.8. The victimisation profile of forcibly displaced persons diverges significantly from the reports of idiosyncratic shocks directed at 'stayers'. Ibáñez (Citation2008) shows that rural households forced to flee report a high incidence of direct victimisation: 54.5 per cent of households were directly threatened, 34.5 per cent experienced the killing of a household member, and 17.3 per cent had a household member forcefully recruited by armed groups.9. Our definition of covariate conflict shocks includes events related to conflict – such as kidnapping, extortions, and threat from armed groups – and others, such as murders, which are also akin to crime. However, our results are robust to excluding murder from covariate shocks.10. The survey directly asked respondents about the time they dedicated to 'non-agricultural activities in their own farm' and 'non-agricultural activities in other farms'.11. Leisure and recreation, personal care, helping other households, social community activities, education, looking for a job, and travelling to the workplace.12. These results are available upon request.