Nikita Melnikov, Assistant Professor of Economics at Nova School of Business & Economics (Nova SBE), has been awarded an ERC Starting Grant from the European Research Council (ERC). The €1.5 million funding will support the five-year research project "Gang Crackdowns: Labour Mobility, Development, and Discrimination in Post-Gang El Salvador (CRACKDOWNS)."
The ERC Starting Grant awarded to Nikita Melnikov is the fourth European Research Council grant secured by Nova SBE and the only one awarded this year in Portugal in the panel covering Economics, Management, and Finance.
Over the five years of research, the project will study how societies transform when criminal organizations lose territorial control. The research takes place in El Salvador, in Central America, where the MS-13 and Barrio 18 gangs controlled large parts of the country for decades. In 2022, a large-scale government operation led to the arrest of more than 1% of the population, rapidly dismantling these organizations’ territorial structures.
Previous research by Professor Nikita Melnikov showed that, before the crackdown, boundaries imposed by gangs restricted residents’ mobility and access to higher-paying jobs, contributing to significant differences in income and other socioeconomic indicators between gang-controlled areas and neighboring areas.
Initial results following the operation suggest that some of these restrictions disappeared rapidly: differences in freedom of movement between former gang-controlled areas and neighboring areas declined significantly, while income and wealth disparities narrowed, although they did not disappear completely.
From the End of Gang Control to the Emergence of New Barriers
In a pilot study conducted with Salvadoran employers, candidates with identical profiles but an address outside a former gang-controlled area were selected in 60% of cases. Based on this evidence, the CRACKDOWNS project will analyze three dimensions of El Salvador’s transformation in the post-gang period.
First, it will study the operation’s impact on children’s education and human capital formation; second, the project will examine how economic activity and investment are being redistributed across the territory; and finally, it will assess whether targeted labor market programs can reduce discrimination based on place of residence and facilitate the integration of workers from former gang-controlled areas.
About the Funded Project
For years, the MS-13 and Barrio 18 gangs constrained El Salvador’s development by restricting people’s movement in areas under their control, preventing them from accessing higher-paying jobs in other parts of the city and forcing them to take low-wage jobs in their communities. In 2022, an unprecedented state offensive led to the arrest of more than 1% of the population and the dismantling of gang territorial control across the country.
Initial evidence points to a significant improvement in security and a narrowing of the gaps in mobility, income, and wealth between former gang-controlled areas and the rest of the country. Still, in a pilot study with Salvadoran employers, candidates with identical résumés were 60% more likely to be selected when their address was outside former gang territories.
Fourth ERC Grant Awarded to Nova SBE
With the award of the ERC Starting Grant to Nikita Melnikov, Nova SBE now has four European Research Council (ERC) grants. The school already has two grants awarded to Professor Miguel Ferreira – in 2012, for the project “Universal Banking, Corporate Control, and Financial Crises,” and in 2025, for the project “Finanças para Todos” – as well as an ERC grant awarded to Professor Alex Armand in 2021 for the project “The Global Impact of Coastal Water Contamination on Economic Development.”