Brandon Parsons Co-Authors Original Study Linking Real Wages to Internal Conflict in Developing Countries

A new peer-reviewed study co-authored by Brandon Parsons, a faculty member at Pepperdine Graziadio Business School, provides compelling evidence that rising real wages may help ease domestic unrest in developing nations. Published in Research in Globalization, the research examines 65 developing countries from 1990 to 2021 and finds that improvements in purchasing power are consistently associated with lower levels of political violence, terrorism, and civil disorder.

The study is among the first to directly analyze how year-to-year changes in real wages, rather than broader indicators such as GDP or inflation alone, influence different forms of unrest. Using advanced econometric techniques, including Method of Moments quantile regressions, the authors show that wage changes affect countries differently depending on their baseline levels of instability.

The findings highlight the stabilizing effect of wage growth. Increases in real wages are linked to measurable declines in political violence, terrorism, and civil disorder, particularly in countries already experiencing elevated unrest. Conversely, while falling wages do not consistently trigger large-scale civil wars or coups, they do intensify smaller-scale violence in already volatile environments. The effects, the study finds, are largely short-term and context-dependent rather than persistent over decades.

By focusing specifically on real wages, nominal wages adjusted for inflation, Parsons and his co-author provide policymakers with a more precise lens for understanding economic grievance. Drawing on data from the International Country Risk Guide and incorporating controls for state capacity, inequality, governance, and social tensions, the research strengthens confidence in its conclusions.

As internal conflict continues to challenge economic development across much of the developing world, the study offers a practical insight: strengthening household purchasing power may not only improve economic well-being but also help reduce instability.

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