By Marcela Neves Bezerra and Mitja Kovac

Modern Brazil is plagued by social and economic inequalities, endemic violence, crime, and weak rule of law. Once these narratives become dependent on each other, all aspects must be worked on to change the scenario experienced in the country, of insecurity, fear and lack of opportunities. This paper argues that unprecedented increase in social injustice in Brazil is not the result of short-term measures, but the materialization of a history marked by economic and social inequalities that extend from the colonial period to the present moment and faulty criminal policies that intensified in the mid-1990's. Moreover, current massive incarceration, overcrowding of prisons combined with the lack of human living conditions is turning Brazil into a gigantic, perpetual school of crime. Investment in education that has a direct effect on the decrease of crime rate, must be aligned with the structuring of a new, less repressive and more inclusive punitive policy, to induce criminals not to recur to crime. Paper suggests that essential development in Brazil is possible only if the efficient legal institutions, rule of law, and criminal sanctioning based on principles of social justice are available to all citizens.

School of Economics and Business University of Ljubljana, 2020,

By Diogo Britto, Paolo Pinotti, Breno Sampaio

We investigate the effect of job loss and unemployment benefits on criminal behavior, exploiting individual-level data on the universe of workers and criminal cases in Brazil over the 2009-2017 period. We match workers displaced upon plausibly exogenous mass layoffs with observationally-equivalent control groups to identify dynamic treatment effects of job loss while allowing for treatment effect heterogeneity. In our preferred specification, the probability of criminal prosecution increases by 23% upon job loss and remains approximately constant during the following years. Our unusually large dataset allows us to precisely estimate increases in almost all types of crimes - including offenses with no economic motivation - as well as spillover effects on other household members. The estimated effects remain robust when restricting to arrests "in flagrante", which are less subject to differential reporting by employment status. We then evaluate the mitigating effect of unemployment benefits leveraging on discontinuous changes in eligibility. Regression discontinuity estimates suggest that unemployment benefits covering 3 to 5 months after displacement completely offset potential crime increases upon job loss, especially for liquidity-constrained individuals, although this effect completely vanishes upon 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.

Bonn: Institute of Labor Economics (IZA), 2020. 77p.