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The Effect of Job Loss and Unemployment Insurance on Crime in Brazil

Author

Listed:
  • Diogo Britto

    (Diogo Britto)

  • Paolo Pinotti

    (Paolo Pinotti)

  • Breno Sampaio

    (Breno Sampaio)

Abstract

We investigate the effect of job loss and unemployment benefits on crime, exploiting unique individual-level data on the universe of workers and criminal cases in Brazil over the 2009-2017 period. We find that the probability of criminal prosecution increases on average by 23% for workers displaced upon mass layoffs, and by slightly less for their cohabiting sons. Using causal forests, we show that the effect is driven entirely by young and low tenure workers, while there is no heterogeneity by education and income. Regression discontinuity estimates indicate that unemployment benefit eligibility completely offsets potential crime increases upon job loss, but this effect completely vanishes immediately after benefit expiration. Our findings point at liquidity constraints and psychological stress as main drivers of criminal behavior upon job loss, while substitution between time on the job and leisure does not seem to play an important role.

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  • Diogo Britto & Paolo Pinotti & Breno Sampaio, "undated". "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," RF Berlin - CReAM Discussion Paper Series 2128, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
  • Handle: RePEc:crm:wpaper:2128
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    Cited by:

    1. Pinotti, Paolo & Bhalotra, Sonia & Britto, Diogo & Sampaio, Breno, 2021. "Job Displacement, Unemployment Benefits and Domestic Violence," CEPR Discussion Papers 16350, C.E.P.R. Discussion Papers.
    2. Pinotti, Paolo, 2020. "The credibility revolution in the empirical analysis of crime," CEPR Discussion Papers 14850, C.E.P.R. Discussion Papers.
    3. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo & Nicolas Torres, 2023. "Formal Employment and Organised Crime: Regression Discontinuity Evidence from Colombia," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2427-2448.
    4. Guilherme Amorim & Diogo Britto & Alexandre Fonseca & Breno Sampaio, 2022. "Job Loss, Unemployment Insurance and Health: Evidence from Brazil," BAFFI CAREFIN Working Papers 22192, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    5. Andrea Bassanini & Eve Caroli & Kevin Geay & Antoine Rebérioux, 2023. "Heavy is the Crown: CEOs' Social Interactions and Layoff Decisions," PSE Working Papers hal-04118212, HAL.
    6. Fetzer, Thiemo, 2023. "Did the policy response to the energy crisis cause crime? Evidence from England," CAGE Online Working Paper Series 662, Competitive Advantage in the Global Economy (CAGE).
    7. Melissa Newham & Marica Valente, 2022. "The Cost of Influence: How Gifts to Physicians Shape Prescriptions and Drug Costs," Papers 2203.01778, arXiv.org, revised Apr 2023.
    8. Francesco Filippucci, 2022. "What Do NEETs Need? The Effect of Combining Activation Policies and Cash Transfers," Working Papers halshs-03524083, HAL.
    9. Eduardo Ferraz & Rodrigo Soares & Juan Vargas, 2022. "Unbundling the relationship between economic shocks and crime," Chapters, in: Paolo Buonanno & Paolo Vanin & Juan Vargas (ed.), A Modern Guide to the Economics of Crime, chapter 8, pages 184-204, Edward Elgar Publishing.
    10. Athey, Susan & Simon, Lisa & Skans, Oskar & Johan Vikström, Johan & Yakymovych, Yaroslav, 2024. "The heterogeneous earnings impact of job lossacross workers, establishments, and markets," Working Paper Series 2024:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. Corrado Giulietti & Brendon McConnell, 2020. "Kicking You When You're Already Down: The Multipronged Impact of Austerity on Crime," Papers 2012.08133, arXiv.org, revised Aug 2022.
    12. Susan Athey & Lisa K. Simon & Oskar N. Skans & Johan Vikstrom & Yaroslav Yakymovych, 2023. "The Heterogeneous Earnings Impact of Job Loss Across Workers, Establishments, and Markets," Papers 2307.06684, arXiv.org, revised Feb 2024.
    13. Marcelo Castro & Cesar Tirso, 2023. "The impacts of the age of majority on the exposure to violent crimes," Empirical Economics, Springer, vol. 64(2), pages 983-1023, February.
    14. Paolo Pinotti, 2020. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(2), pages 207-220, July.
    15. Leah Platt Boustan & Jiwon Choi & David Clingingsmith, 2024. "The Political Fallout of Machine Tool Automation in the Mid-20th Century United States," NBER Chapters, in: The Economic History of American Inequality: New Evidence and Perspectives, National Bureau of Economic Research, Inc.
    16. Marco Letta & Pierluigi Montalbano & Adriana Paolantonio, 2024. "Climate Immobility Traps: A Household-Level Test," Papers 2403.09470, arXiv.org.
    17. Ana Margarida Fernandes & Joana Silva, 2023. "Adjusting to Transitory Shocks: Worker Impact, Firm Channels, and (Lack of) Income Support," CESifo Working Paper Series 10479, CESifo.
    18. Stefano Cellini & Livia Menezes & Martin Foureaux Koppensteiner, 2022. "Maternal Displacements during Pregnancy and the Health of Newborns," Discussion Papers 22-02, Department of Economics, University of Birmingham.
    19. Paolo Pinotti, 0. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 0, pages 1-14.
    20. Lunyu Xie & Tianhua Zou & Joshua Linn & Haosheng Yan, 2024. "Can Building Subway Systems Improve Air Quality? New Evidence from Multiple Cities and Machine Learning," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(4), pages 1009-1044, April.
    21. Bingley, Paul & Cappellari, Lorenzo & Ovidi, Marco, 2023. "When It Hurts the Most: Timing of Parental Job Loss and a Child's Education," IZA Discussion Papers 16367, Institute of Labor Economics (IZA).
    22. Figueiredo, Ana & Marie, Olivier & Markiewicz, Agnieszka, 2024. "Job Security and Liquid Wealth," IZA Discussion Papers 16744, Institute of Labor Economics (IZA).
    23. Newham, Melissa & Valente, Marica, 2024. "The cost of influence: How gifts to physicians shape prescriptions and drug costs," Journal of Health Economics, Elsevier, vol. 95(C).
    24. Francesco Filippucci, 2022. "What Do NEETs Need? The Effect of Combining Activation Policies and Cash Transfers," PSE Working Papers halshs-03524083, HAL.
    25. Diogo G. C. Britto & Roberto Hsu Rocha & Paolo Pinotti & Breno Sampaio, 2024. "Small Children, Big Problems: Childbirth and Crime," CESifo Working Paper Series 11083, CESifo.

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    More about this item

    Keywords

    unemployment; crime; unemployment insurance; registry data;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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