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The effect of pretrial detention on labor market outcomes

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  • Nicolas Grau
  • Gonzalo Marivil
  • Jorge Rivera

Abstract

We combine Chilean individual administrative data for criminal cases and labor market outcomes to estimate the effect of pretrial detention on labor outcomes using the Difference-in-differences (DiD) method and an instrumental variables (IV) approach. The IV approach takes advantage of the quasi-random assignment of judges. The IV results show that pretrial detention reduces the probability of having formal employment and the average monthly wage by 39% and 56% during the six months following the final trial verdict. DiD estimation delivers estimates that are between one-third and one-half smaller. The magnitudes of the effects shown continue to be relevant as much as 24 months after the final trial verdict. The results of our analysis suggest that the negative effect of pretrial detention is (at least) driven by the lasting effect of being excluded from the labor market during the trial, the accompanying social stigma, and the impact of pretrial detention on the probability of post-verdict incarceration.

Suggested Citation

  • Nicolas Grau & Gonzalo Marivil & Jorge Rivera, 2021. "The effect of pretrial detention on labor market outcomes," Working Papers wp518, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp518
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    References listed on IDEAS

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    Cited by:

    1. Doménech-Pascual, Gabriel & Jiménez, Juan Luis, 2024. "Changes in damages when liability rules change: an empirical study on compensation for the time spent in pretrial detention," International Review of Law and Economics, Elsevier, vol. 78(C).
    2. Patricio Dom'inguez & Nicol'as Grau & Dami'an Vergara, 2022. "Discrimination Against Immigrants in the Criminal Justice System: Evidence from Pretrial Detentions," Papers 2202.10685, arXiv.org.
    3. Nicolás Grau & Damián Vergara, "undated". "A Simple Test for Prejudice in Decision Processes: The Prediction-Based Outcome Test," Working Papers wp493, University of Chile, Department of Economics.

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