IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/26313.html
   My bibliography  Save this paper

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
    Note: DEV LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w26313.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christopher S. Carpenter, 2005. "Heavy Alcohol Use and the Commission of Nuisance Crime: Evidence from Underage Drunk Driving Laws," American Economic Review, American Economic Association, vol. 95(2), pages 267-272, May.
    2. Yildirim, H. Semih & Philippatos, George C., 2007. "Restructuring, consolidation and competition in Latin American banking markets," Journal of Banking & Finance, Elsevier, vol. 31(3), pages 629-639, March.
    3. Emilia Del Bono & Andrea Weber & Rudolf Winter-Ebmer, 2012. "Clash Of Career And Family: Fertility Decisions After Job Displacement," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 659-683, August.
    4. Carlos Medina & Jorge Andrés Tamayo, 2011. "An Assessment of How Urban Crime and Victimization Affects Life Satisfaction," Borradores de Economia 640, Banco de la Republica de Colombia.
    5. Christopher Blattman & Julian C. Jamison & Margaret Sheridan, 2017. "Reducing Crime and Violence: Experimental Evidence from Cognitive Behavioral Therapy in Liberia," American Economic Review, American Economic Association, vol. 107(4), pages 1165-1206, April.
    6. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    7. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    8. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    9. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    10. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo & Nicolas Torres, 2023. "Formal Employment and Organised Crime: Regression Discontinuity Evidence from Colombia," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2427-2448.
    11. Meghir, Costas & Palme, Mårten & Schnabel, Marieke, 2011. "The Effect of Education Policy on Crime: An Intergenerational Perspective," Research Papers in Economics 2011:23, Stockholm University, Department of Economics.
    12. Philippe Aghion & Ufuk Akcigit & Angus Deaton & Alexandra Roulet, 2016. "Creative Destruction and Subjective Well-Being," American Economic Review, American Economic Association, vol. 106(12), pages 3869-3897, December.
    13. Hjalmarsson, Randi & Lindquist, Matthew J., 2013. "The origins of intergenerational associations in crime: Lessons from Swedish adoption data," Labour Economics, Elsevier, vol. 20(C), pages 68-81.
    14. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    15. Cameron, A. Colin & Gelbach, Jonah B. & Miller, Douglas L., 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 238-249.
    16. Rafael Dix-Carneiro & Rodrigo R. Soares & Gabriel Ulyssea, 2018. "Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 158-195, October.
    17. Vincent Bignon & Eve Caroli & Roberto Galbiati, 2017. "Stealing to Survive? Crime and Income Shocks in Nineteenth Century France," Economic Journal, Royal Economic Society, vol. 127(599), pages 19-49, February.
    18. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1265-1306.
    19. Rege, Mari & Skardhamar, Torbjørn & Telle, Kjetil & Votruba, Mark, 2019. "Job displacement and crime: Evidence from Norwegian register data," Labour Economics, Elsevier, vol. 61(C).
    20. Jason M. Lindo & Peter Siminski & Isaac D. Swensen, 2018. "College Party Culture and Sexual Assault," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 236-265, January.
    21. D. Mark Anderson & Resul Cesur & Erdal Tekin, 2015. "Youth Depression And Future Criminal Behavior," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 294-317, January.
    22. Bondurant, Samuel R. & Lindo, Jason M. & Swensen, Isaac D., 2018. "Substance abuse treatment centers and local crime," Journal of Urban Economics, Elsevier, vol. 104(C), pages 124-133.
    23. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2015. "Losing Heart? The Effect of Job Displacement on Health," ILR Review, Cornell University, ILR School, vol. 68(4), pages 833-861, August.
    24. Quamrul Ashraf & Oded Galor, 2013. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," American Economic Review, American Economic Association, vol. 103(1), pages 1-46, February.
    25. Patrick Bennett & Amine Ouazad, 2020. "Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms [The Link between Human Capital, Mass Layoffs, and Firm Deaths]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2182-2220.
    26. Caroline Doyle, 2016. "Explaining Patterns of Urban Violence in Medellin, Colombia," Laws, MDPI, vol. 5(1), pages 1-17, February.
    27. Nathaniel G. Hilger, 2016. "Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 247-283, July.
    28. Kerwin Kofi Charles & Melvin Stephens, 2004. "Job Displacement, Disability, and Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 489-522, April.
    29. Stefan Gissler & Rodney Ramcharan & Edison Yu, 2018. "The Effects of Competition in Consumer Credit Markets," Working Papers 18-24, Federal Reserve Bank of Philadelphia.
    30. Mari Rege & Kjetil Telle & Mark Votruba, 2011. "Parental Job Loss and Children's School Performance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1462-1489.
    31. Kenneth A. Couch & Dana W. Placzek, 2010. "Earnings Losses of Displaced Workers Revisited," American Economic Review, American Economic Association, vol. 100(1), pages 572-589, March.
    32. Brett Watson & Mouhcine Guettabi & Matthew Reimer, 2020. "Universal Cash and Crime," The Review of Economics and Statistics, MIT Press, vol. 102(4), pages 678-689, October.
    33. Melissa Dell & Benjamin Feigenberg & Kensuke Teshima, 2019. "The Violent Consequences of Trade-Induced Worker Displacement in Mexico," American Economic Review: Insights, American Economic Association, vol. 1(1), pages 43-58, June.
    34. Vincent Bignon & Eve Caroli & Roberto Galbiati, 2017. "Stealing to Survive? Crime and Income Shocks in Nineteenth Century France," Economic Journal, Royal Economic Society, vol. 127(599), pages 19-49, February.
    35. Pablo T. Spiller & Edgardo Favaro, 1984. "The Effects of Entry Regulation on Oligopolistic Interaction: The Uruguayan Banking Sector," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 244-254, Summer.
    36. Angelini, Paolo & Cetorelli, Nicola, 2003. "The Effects of Regulatory Reform on Competition in the Banking Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 663-684, October.
    37. Martha Bottia & Lina Cardona-Sosa & Carlos Medina, 2012. "El SISBEN como mecanismo de focalización individual del régimen subsidiado en salud en Colombia: ventajas y limitaciones," Revista de Economía del Rosario, Universidad del Rosario, December.
    38. Ishani Tewari, 2014. "The Distributive Impacts of Financial Development: Evidence from Mortgage Markets during US Bank Branch Deregulation," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 175-196, October.
    39. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    40. Christopher Blattman & Jeannie Annan, 2015. "Can Employment Reduce Lawlessness and Rebellion? A Field Experiment with High-Risk Men in a Fragile State," NBER Working Papers 21289, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo & Nicolas Torres, 2023. "Formal Employment and Organised Crime: Regression Discontinuity Evidence from Colombia," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2427-2448.
    2. Stefano Cellini & Livia Menezes & Martin Foureaux Koppensteiner, 2022. "Maternal Displacements during Pregnancy and the Health of Newborns," Discussion Papers 22-02, Department of Economics, University of Birmingham.
    3. Diogo G. C. Britto & Paolo Pinotti & Breno Sampaio, 2022. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," Econometrica, Econometric Society, vol. 90(4), pages 1393-1423, July.
    4. Remco van Eijkel & Sander Gerritsen & Klarita Sadiraj & Maroesjka Versantvoort, 2021. "The causal effects of employment on mental health and criminality for disabled workers," CPB Discussion Paper 425, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Ivandić, Ria & Lassen, Anne Sophie, 2023. "Gender gaps from labor market shocks," LSE Research Online Documents on Economics 119948, London School of Economics and Political Science, LSE Library.
    6. Ivandić, Ria & Lassen, Anne Sophie, 2023. "Gender gaps from labor market shocks," Labour Economics, Elsevier, vol. 83(C).
    7. Garg, Teevrat & McCord, Gordon C. & Montfort, Aleister, 2020. "Can Social Protection Reduce Environmental Damages?," IZA Discussion Papers 13247, Institute of Labor Economics (IZA).
    8. Grace Armijos-Bravo & Segundo Camino-Mogro, 2023. "Covid-19 Lockdown in Ecuador: Are there Gender Differences in Unemployment?," Journal of Development Studies, Taylor & Francis Journals, vol. 59(6), pages 833-853, June.
    9. Magaly Faride Herrera Giraldo & Carlos Giovanni González Espitia & Héctor Ochoa Díaz, 2023. "The spatial and economic relationship between labour informality and homicides in Cali, Colombia," Development Policy Review, Overseas Development Institute, vol. 41(5), September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diogo G. C. Britto & Paolo Pinotti & Breno Sampaio, 2022. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," Econometrica, Econometric Society, vol. 90(4), pages 1393-1423, July.
    2. Patrick Bennett & Amine Ouazad, 2020. "Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms [The Link between Human Capital, Mass Layoffs, and Firm Deaths]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2182-2220.
    3. Gathmann, Christina & Huttunen, Kristiina & Jernström, Laura & Sääksvuori, Lauri & Stitzing, Robin, 2020. "In Sickness and in Health: Job Displacement and Health. Spillovers in Couples," Working Papers 133, VATT Institute for Economic Research.
    4. Neffke, Frank & Nedelkoska, Ljubica & Wiederhold, Simon, 2024. "Skill mismatch and the costs of job displacement," Research Policy, Elsevier, vol. 53(2).
    5. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo & Nicolas Torres, 2023. "Formal Employment and Organised Crime: Regression Discontinuity Evidence from Colombia," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2427-2448.
    6. Lindgren, Petter Y. & Presterud, Ane Ofstad, 2021. "Expanding the Norwegian Armed Forces in the Time of Corona: Benefit-Cost Analysis in the Context of High Unemployment Rate," MPRA Paper 106405, University Library of Munich, Germany.
    7. Patrick Bennett, 2021. "The Work-To-School Transition: Job Displacement and Skill Upgrading among Young High School Dropouts," CESifo Working Paper Series 9417, CESifo.
    8. Marcus Eliason, 2012. "Lost jobs, broken marriages," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1365-1397, October.
    9. Martti Kaila & Emily Nix & Krista Riukula, 2021. "Disparate Impacts of Job Loss by Parental Income and Implications for Intergenerational Mobility," Opportunity and Inclusive Growth Institute Working Papers 53, Federal Reserve Bank of Minneapolis.
    10. Kristiina Huttunen & Jarle Møen & Kjell G. Salvanes, 2018. "Job Loss and Regional Mobility," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 479-509.
    11. Carneiro, Pedro & Salvanes, Kjell G. & Willage, Barton & Willén, Alexander, 2022. "The Timing of Parental Job Displacement, Child Development and Family Adjustment," IZA Discussion Papers 15630, Institute of Labor Economics (IZA).
    12. Di Maio, Michele & Nisticò, Roberto, 2019. "The effect of parental job loss on child school dropout: Evidence from the Occupied Palestinian Territories," Journal of Development Economics, Elsevier, vol. 141(C).
    13. Nicholas A. Jolly, 2022. "The effects of job displacement on spousal health," Review of Economics of the Household, Springer, vol. 20(1), pages 123-152, March.
    14. Britto, Diogo & Melo, Caique & Sampaio, Breno, 2022. "The Kids Aren't Alright: Parental Job Loss and Children's Outcomes Within and Beyond Schools," CEPR Discussion Papers 17562, C.E.P.R. Discussion Papers.
    15. Rege, Mari & Skardhamar, Torbjørn & Telle, Kjetil & Votruba, Mark, 2019. "Job displacement and crime: Evidence from Norwegian register data," Labour Economics, Elsevier, vol. 61(C).
    16. Kristiina Huttunen & Jenni Kellokumpu, 2016. "The Effect of Job Displacement on Couples' Fertility Decisions," Journal of Labor Economics, University of Chicago Press, vol. 34(2), pages 403-442.
    17. Mörk, Eva & Sjögren, Anna & Svaleryd, Helena, 2019. "Consequences of Parental Job Loss on the Family Environment and on Human Capital Formation: Evidence from Plant Closures," IZA Discussion Papers 12559, Institute of Labor Economics (IZA).
    18. Gathmann, Christina & Helm, Ines & Schönberg, Uta, 2014. "Spillover Effects in Local Labor Markets: Evidence from Mass Layoffs," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100378, Verein für Socialpolitik / German Economic Association.
    19. Paul Bingley & Lorenzo Cappellari & Marco Ovidi, 2023. "When it hurts the most: timing of parental job loss and a child’s education," LISER Working Paper Series 2023-12, Luxembourg Institute of Socio-Economic Research (LISER).
    20. Kjell G. Salvanes & Barton Willage & Alexander Willén, 2024. "The Effect of Labor Market Shocks across the Life Cycle," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 121-160.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:26313. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.