The Invisible Hemorrhage: $400 Million to $900 Million in Human Capital Destroyed by Gangs in 2024

The exercise of translating human tragedy into economic terms sometimes reveals truths that emotion alone could not convey with the same force. This attempt to apply human capital valuation methods to the 5,600 deaths that occurred in Haiti in 2024, as documented by the Office of the United Nations High Commissioner for Human Rights, suggests a range of $400 million to $900 million in productive wealth wiped out, the equivalent of 20 to 45% of the national budget. The width of this range attests to the considerable uncertainty surrounding such an exercise.

Methodological foundations: between conceptual legacy and acknowledged limits

The exercise of valuing destroyed human capital (and it would be dishonest of us to deny that it raises genuine ethical as well as methodological questions) belongs to an intellectual tradition whose lineage is worth retracing briefly. In his article “The Life You Save May Be Your Own” (The Public Interest, no. 15, spring 1968, pp. 127–136), Thomas C. Schelling laid the theoretical groundwork for what would become the “Value of a Statistical Life.” This insight was formalized by Ezra J. Mishan in Cost-Benefit Analysis: An Introduction (London, George Allen & Unwin, 1971, chapter 17), then systematized by W. Kip Viscusi, notably in “The Value of Life: Estimates with Risks by Occupation and Industry” (Economic Inquiry, vol. 22, no. 1, January 1984, pp. 29–48).

It must be acknowledged at the outset, however (and this acknowledgment is the indispensable prerequisite for any serious analysis), that applying these methods to the Haitian context runs into considerable methodological obstacles. The VSL, as Viscusi conceived it, rests on observing the “risk premiums” that workers accept in functioning labor markets. Yet how can this approach be transposed to an economy where the Haitian Institute of Statistics and Informatics (IHSI) estimates that 60% of activity falls within the informal sector¹?

This difficulty leads us to favor the alternative approach of discounted human capital, developed notably by Michael W. Jones-Lee in The Economics of Safety and Physical Risk (Oxford, Basil Blackwell, 1989, chapters 3–4). This method, however less sophisticated it may seem, has the advantage of computational transparency and of being applicable in development contexts.

The estimate: between necessary approximations and acknowledged uncertainties

The basic calculation rests on Haiti’s GDP per capita, which the latest available World Bank estimates put at $2,143 in 2024², multiplied by the average remaining productive life expectancy. This last variable is the first major source of uncertainty in our exercise: in the absence of precise data on the age and socioeconomic profile of the victims, a gap symptomatic of the collapse of national statistical capacity, we are forced to extrapolate.

The available studies of urban violence in Central America suggest that victims are concentrated in the 15–34 age bracket. In its Global Study on Homicide 2023 (Vienna, 2024, p. 47), the UNODC reports that this cohort accounts for between 55% and 70% of homicide victims in the region. Assuming a median age of 25 for Haitian victims (an extrapolation we acknowledge as such), this corresponds to 35 years of remaining productive life.

The basic calculation (5,600 deaths × $2,143 × 35 years) yields $420 million in human capital directly wiped out.

Multiplier effects: between Keynesian theory and Haitian reality

The real economic impact of such a loss of human capital necessarily exceeds the simple sum of individual productive contributions. The Keynesian multiplier effect, a concept developed in The General Theory of Employment, Interest and Money (1936), teaches that each unit of income removed generates a cumulative contraction in aggregate demand according to the formula 1/(1-c), where c is the marginal propensity to consume.

For Caribbean economies, IMF studies generally put this propensity at between 0.75 and 0.85³, which would theoretically imply a multiplier of 4 to 6. Applied mechanically to our baseline of $420 million, this would put the total impact at between $1.7 billion and $2.5 billion, amounts that plainly defy common sense in a $20 billion economy.

This extrapolation reveals the limits of applying Keynesian models mechanically to the Haitian economy. How can the assumption of an integrated economic circuit be applied to a country where import “leakages” are massive, where informal monetary circuits coexist with the formal banking system, and where violence itself fragments economic networks?

Lacking empirical data specific to the Haitian context, we therefore use a deliberately conservative multiplier of between 1.2 and 1.8, a range that reflects our uncertainty about the true scale of the knock-on effects in the Haitian economy.

A sectoral sketch: extrapolations acknowledged as such

The absence of official data on the socioeconomic profile of the victims forces us to estimate by analogy, and the highly speculative nature of these estimates must be stressed from the outset. Drawing on field reports from humanitarian organizations present in Haiti and on analyses by the International Crisis Group⁴, we sketch a sectoral breakdown in which each percentage should be understood as a rough approximation.

If we suppose (and the word is not too strong) that 45% of the victims come from the informal sector, the assumption rests on the following logic: this sector, which according to the World Bank accounts for about 60% of Haitian economic activity, also concentrates the people most exposed to urban violence (street vendors, transport workers, artisans).

Attributing 25% of the victims to the agricultural sector rests on the observation that the violence has spread to rural areas, particularly in the Artibonite. For the remaining 30%, our extrapolations suggest a rough split between formal services (15%: teachers, civil servants, health workers), the textile industry (5%, a sector particularly exposed because of its geographic concentration), and a residual category of the economically inactive, the unemployed, or students (10%).

These methodological caveats should not obscure the usefulness of the exercise: on the contrary, they are the condition of its validity. For the point is less to produce a definitive figure than to shed light on the order of magnitude of an economic phenomenon that has so far gone unquantified.

The final assessment: a range of uncertainty

At the end of this exercise in approximation, our assessment puts the loss of human capital in 2024 in a range of $400 million to $900 million, or 2% to 4.5% of Haiti’s GDP. This considerable spread, which may surprise readers accustomed to precise figures, faithfully reflects the state of our knowledge of the Haitian economy in a situation of conflict.

The lower bound ($400 million) corresponds to a minimal assessment limited to direct human capital ($420 million), adjusted downward for the uncertainties about the age and profile of the victims. The upper bound ($900 million) includes not only the multiplier effect (1.8) but also an approximation of the replacement costs associated with the loss of skills and know-how.

This range, however unsatisfying it may seem to anyone seeking precision, nonetheless offers a first quantitative glimpse of the economic scale of a tragedy hitherto viewed solely through a humanitarian lens.

The cumulative effect: six years of hemorrhage

Extending this analysis to the 2019–2024 period, with all the usual caveats about the gradual deterioration in data quality, suggests a cumulative cost of between $1.5 billion and $4 billion over six years. This progression, from an estimated $50 million or so in 2019 to $400–900 million in 2024, traces the trajectory of a country caught in what Paul Collier, in The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It (Oxford University Press, 2007, chapter 1), calls the “conflict trap.”

These orders of magnitude, however approximate, put a gradual erosion of human capital into comparative perspective: it would represent the equivalent of two to five years of national tax revenue, or three to ten years of the international aid received.

Conclusion: the limits of a necessary exercise

At the end of this attempt at assessment, it is worth returning to its limits as much as to its lessons. What we are attempting here is to put approximate figures on a reality that goes uncounted, to apply methods designed for developed economies to a context of extreme fragmentation, and to extrapolate necessarily fragile conclusions from partial data.

Each of our assumptions (the median age of the victims, the sectoral breakdown, the economic multiplier) would deserve dedicated empirical research for which we lack the means. This spread ($400 million to $900 million) reflects the structural uncertainties of the Haitian economy, which we accept as inherent to the exercise rather than as methodological failures.

Yet this exploratory assessment reveals orders of magnitude that demand attention. It suggests that every year, because of violence, Haiti loses the equivalent of several points of GDP in human capital, a cumulative destruction of human capital that mortgages the country’s future far beyond the individual tragedies it represents.

These figures, however imperfect, offer Haitian and international policymakers alike a first quantitative glimpse of the economic scale of a crisis hitherto measured only by humanitarian indicators. They show that inaction, too, has its cost, now partly quantifiable, and that investment in security could be justified on strictly economic grounds, quite apart from moral imperatives.

Econometrics, in this instance, does not claim to sum up the Haitian tragedy. It simply sheds light on one of its dimensions that has so far been neglected, with the humility befitting any attempt to quantify human life and the rigor that alone can legitimize such approximations.

1. Haitian Institute of Statistics and Informatics (IHSI), Enquête sur l’emploi et l’économie informelle, Port-au-Prince, 2020.

2. World Bank, Haiti Overview, October 2024 update, available at worldbank.org.

3. International Monetary Fund, Regional Economic Outlook: Western Hemisphere, October 2024, chapter 2.

4. International Crisis Group, Haïti: Gouverner ou Subir, Latin America/Caribbean Report no. 97, February 2024.