The Effects of a Large-Scale Mental Health Reform: Evidence from Brazil

This paper studies the Brazilian Psychiatric Reform, , which reorganized the public mental health care provision by introducing mental health centers ( CAPS ) as a community-based substitute for inpatient care. Our research design exploits the rollout of CAPS in a difference-in-differences framework. We show that these centers increased outpatient mental health care production and reduced psychiatric hospitalizations. These reductions were more pronounced for long-stay admissions and among patients with schizophrenia. We find that the savings implied by fewer admissions do not offset the cost of the policy. Also, , the reform did not reduce mental health mortality and it increased violent crimes. ( JEL H51, I12, I18, O15) )