Abstract: In the mid-1990s, after the deportation of gang members from the United States, El Salvador witnessed the emergence of two powerful gangs, MS-13 and 18th Street, which significantly limited socioeconomic development and displaced economic activity in the country. In 2022, the Salvadoran government was at last able to regain territorial control over parts of the country that had been subject to gang rule. Using detailed surveys and the exact boundaries of the neighborhoods previously controlled by the gangs, we analyze how the removal of gang territorial control affected socioeconomic outcomes in these areas. We find that, after the 2022 gang crackdowns, individuals from former gang-controlled areas experienced substantial improvements in their mobility and economic conditions. Despite this, we find that employers are still hesitant to hire individuals from former gang-affected areas, plausibly due to their perceived affiliation with the gangs.

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