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Job Loss, Credit and Crime in Colombia

Author

Listed:
  • Gaurav Khanna
  • Carlos Medina
  • Anant Nyshadham
  • Christian Posso
  • Jorge A. Tamayo

Abstract

We investigate the effects of job displacement, as a result of mass-layoffs, on criminal arrests using a novel matched employer-employee-crime dataset in Medellín, Colombia. Job displacement leads to immediate earnings losses, and an increased likelihood of being arrested for both the displaced worker and for other youth in the family. We leverage variation in opportunities for legitimate reemployment and access to consumption credit to investigate the mechanisms underlying this job loss-crime relationship. Workers in booming sectors with more opportunities for legitimate reemployment exhibit smaller increases in arrests after job losses. Greater exposure to expansions in consumption credit also lowers the job loss-crime elasticity.

Suggested Citation

  • Gaurav Khanna & Carlos Medina & Anant Nyshadham & Christian Posso & Jorge A. Tamayo, 2019. "Job Loss, Credit and Crime in Colombia," NBER Working Papers 26313, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26313
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    Cited by:

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    2. Diogo Britto & Paolo Pinotti & Breno Sampaio, 2020. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," BAFFI CAREFIN Working Papers 20139, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Britto, Diogo & Pinotti, Paolo & Sampaio, Breno, 2020. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," IZA Discussion Papers 13280, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • 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
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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