Brazil Award for Paper on Unemployment and Crime
Brazil's Associação Nacional dos Centros de Pós-Graduação em Economia (National Association of Postgraduate Centers in Economics) has awarded the latest edition of the Haralambos Simeonidis Prize to a paper by Paolo Pinotti, Diogo G. C. Britto (both at at Bocconi Baffi-CAREFIN's CLEAN research center) and Breno Sampaio of the Federal University of Pernambuco.
The prize goes each year to the two articles judged best at "stimulating the activities of reflection and research in economics in Brazil". In particular, Paolo Pinotti and his co-authors, as reported on Bocconi Knowledge, in their article The Effect of Job Loss and Unemployment Insurance on Crime in Brazil, published on Econometrica, sought to establish and investigate the impact of job loss on crime and the mitigating role of unemployment benefits, exploiting detailed individualâ€level data linking employment careers, criminal records, and welfare registries for the universe of male workers in Brazil.
The authors were able to estimate precisely the impact of unemployment on crime, and they found that the probability of committing crimes increases on average by 23% for those who lost their jobs for mass layoffs. However, unemployment benefit eligibility completely offsets potential crime increases upon job loss, but this effect vanishes immediately after welfare benefits expire. Therefore, income support should be accompanied by active labor market policies to speed up the return to work guaranteeing a stable income rather than temporary handouts. Besides, the main drivers of criminal behavior upon job loss are financial constraints and psychological stress.
The prize winners are nominated by a committee of seven Brazilian academics.