SummaryThe paper analyses health consequences of forced civilian displacement that occurred during the war in Croatia 1991–1995 which accompanied the demise of Yugoslavia. During the Serbo-Croatian conflict a quarter of Croatian territory was ceded, 22000 people were killed and more than 500000 individuals were displaced. Using the Croatian Adult Health Survey 2003 we identify the causal effect of forced migration on various dimensions of measured and self-assessed health. To circumvent the self-selection into displacement, we adopt an instrumental variable approach where civilian casualties per county are used as an instrument for displacement. We find robust adverse effects on probability of suffering hypertension and tachycardia as well as on self-assessed health and ‘Short form health survey’ health dimensions. Comparing ordinary least squares with instrumental variable estimates yields a conclusion of a positive selection into displacement with respect to latent health. Given the likely violation of the exclusion restriction, we use a method which allows the instrument to affect health outcomes directly and conclude that, even with substantial departures from the exclusion restriction, displacement still adversely affects health.