Do Better Prisons Reduce Recidivism? Evidence from a Prison Construction Program

I study the effects of prison quality on recidivism using individual-level data from Colombia. To estimate causal effects, I leverage the quasi-random assignment of inmates to newer, less crowded, and higher service prisons. For inmates assigned to newer facilities, I find that the probability of returning to prison within one year is 36% lower. Criminal capital, access to rehabilitation programs, and negative prison experiences, which could trigger changes in intrinsic preferences over illegal occupations, seem to be important mechanisms. The program led to substantial welfare gains, even when assuming a low social cost per crime.