Job Loss, Credit and Crime in Colombia

Gaurav Khanna, Carlos Medina, Anant Nyshadham, Christian Posso Suarez (cpossosu@gmail.com) and Jorge Tamayo

Borradores de Economia from Banco de la Republica de Colombia

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 lower increases in arrests after job losses. Greater exposure to an expansion in consumption credit also lowers the increase in arrests after employment shocks. **** RESUMEN: Se estiman los efectos de la pérdida del empleo como resultado de un despido masivo, sobre la probabilidad de ser arrestado, utilizando una novedosa base que parea datos de empleados, empleadores y arrestos en Medellín, Colombia. La pérdida del empleo genera una reducción inmediata en los ingresos, y un incremento en la probabilidad de ser arrestado tanto para el empleado despedido, como para otros familiares jóvenes. Nosotros explotamos la variación en las oportunidades de re-emplearse formalmente y en el acceso a crédito formal de consumo, para estudiar los mecanismos detrás de la relación entre la pérdida del empleo y el crimen. Los trabajadores en sectores en auge, con mayores oportunidades de re-emplearse, ven menos afectada su probabilidad de ser arrestados. Una mayor exposición a una expansión en la oferta de crédito de consumo también debilita la respuesta de los arrestos al choque en el mercado laboral.

Keywords: Job displacements; crime; Medellín; Pérdida del empleo; crimen; Medellín (search for similar items in EconPapers)
JEL-codes: J63 J65 K42 (search for similar items in EconPapers)
Pages: 28
Date: 2019-11
New Economics Papers: this item is included in nep-dev and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://doi.org/10.32468/be.1095

Related works:
Journal Article: Job Loss, Credit, and Crime in Colombia (2021)
Working Paper: Job Loss, Credit and Crime in Colombia (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:1095

DOI: 10.32468/be.1095

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