Recidivism, Labor Markets, and Prison Conditions: Evidence from Uruguay

What explains prison recidivism? Relying on previously unavailable data on prison inmates in Uruguay, we study how external factors, such as employment dynamics on labor-intensive low-skilled jobs, and internal, such as prison-related factors, affect recidivism. Whereas the literature on recidivism has mostly focused on developed countries, we bring its study to the developing world and find that greater employment opportunities in labor-intensive, low-skill sectors, such as construction and domestic services, reduce recidivism. Consistent with the logic of economic opportunities, we also find heterogeneous effects by type of crime (property vs non-property). Finally, we find that prison-specific factors are also relevant, pointing to the importance of understanding prisons as part of the illegal ecosystem and the crime repression system. This analysis is novel to Latin America, a region besieged by the growing influence of criminal organizations that usually extend their influence and power to prisons.