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

Diogo Britto, Paolo Pinotti and Breno Sampaio

No 2128, RF Berlin - CReAM Discussion Paper Series from Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM)

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.

Keywords: unemployment; crime; unemployment insurance; registry data (search for similar items in EconPapers)
JEL-codes: J63 J65 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-ias, nep-lab, nep-law and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: The Effect of Job Loss and Unemployment Insurance on Crime in Brazil (2022) Downloads
Working Paper: The Effect of Job Loss and Unemployment Insurance on Crime in Brazil (2020) Downloads
Working Paper: The Effect of Job Loss and Unemployment Insurance on Crime in Brazil (2020) Downloads
Working Paper: The Effect of Job Loss and Unemployment Insurance on Crime in Brazil (2020) Downloads
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