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

This paper studies the Brazilian psychiatric reform, which reorganized mental healthcare provision by the public system building a network of community-based services centered on the Psychosocial Care Centers (CAPSs). Our research design exploits the roll-out of CAPSs in a differences-in-differences framework. We show that these centers improved outpatient mental healthcare utilization and reduced hospital admissions due to mental and behavioral disorders. Those reductions were more pronounced for long-stay admissions and among patients with schizophrenia. Additionally, centers delivering substance abuse treatment reduced deaths caused by alcoholic liver disease. Finally, we also find that this shift away from inpatient care increased homicides.