Economic Shocks, Social Insurance, and Violent Crimes: Evidence from Brazil

Paolo Pinotti, Bocconi University

Research Grant, 2019

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The project “Economic Shocks, Social Insurance, and Violent Crimes: Evidence from Brazil” aimed to understand the impact of job loss on crime—particularly with regard to domestic violence—and the role of unemployment benefits in preventing criminal behavior after job loss.

To this end, we constructed a large dataset combining detailed administrative data on employment, criminal records, welfare transfers, and family relationships for the universe of Brazilian workers. 

Male job loss increases the probability of committing domestic violence by 32% and female job loss increases the probability of suffering domestic violence by 56%.

The results of the projects can be summarized as follows:

• Job loss increases the probability of committing any type of crime across all workers by 23%.
• The effect is larger for younger workers and workers who are more liquidity constrained.
• Unemployment insurance attenuates the impact of job loss on most types of crime, but the effect is transitory and vanishes away at the end of the benefit period.
• Male job loss increases the probability of committing domestic violence by 32% and female job loss increases the probability of suffering domestic violence by 56%.
• Unemployment benefits have an opposite effect on domestic violence than on any other type of crime; they increase the probability of domestic violence due to longer unemployment spells, which lead in turn to greater exposure of victims to perpetrators.