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Job displacement and crime: Evidence from Norwegian register data

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  • Rege, Mari
  • Skardhamar, Torbjørn
  • Telle, Kjetil
  • Votruba, Mark

Abstract

We estimate the job displacement effect on criminal behavior for young adult Norwegian men separated from their plant of employment during a mass layoff. Displaced workers experience a 20 percent increase in criminal charge rates in the year of displacement, with effects declining thereafter. Effects are particularly large for property crimes, consistent with the idea that displaced workers turn to acquisitive crimes to replace lost earnings. However, effects are also sizable for violent and alcohol/drug-related crimes, indicating other mechanisms at work. We find strong evidence that displacement increases crime effects through the increased availability of time, and supportive evidence that psychological factors (mental distress, self-control) also play a role.

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  • Rege, Mari & Skardhamar, Torbjørn & Telle, Kjetil & Votruba, Mark, 2019. "Job displacement and crime: Evidence from Norwegian register data," Labour Economics, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:labeco:v:61:y:2019:i:c:s0927537119300879
    DOI: 10.1016/j.labeco.2019.101761
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    Cited by:

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    2. Cirera, Xavier & Martins-Neto, Antonio Soares, 2023. "Do innovative firms pay higher wages? Micro-level evidence from Brazil," Research Policy, Elsevier, vol. 52(1).
    3. Lindgren, Petter Y. & Presterud, Ane Ofstad, 2021. "Expanding the Norwegian Armed Forces in the Time of Corona: Benefit-Cost Analysis in the Context of High Unemployment Rate," MPRA Paper 106405, University Library of Munich, Germany.
    4. Georges Bresson & Guy Lacroix & Mohammad Arshad Rahman, 2021. "Bayesian panel quantile regression for binary outcomes with correlated random effects: an application on crime recidivism in Canada," Empirical Economics, Springer, vol. 60(1), pages 227-259, January.
    5. Wunder, Christoph & Zeydanli, Tugba, 2021. "The early costs of plant closures: Evidence on lead effects on workers’ subjective and objective outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 489-505.
    6. Diogo G. C. Britto & Paolo Pinotti & Breno Sampaio, 2022. "The Effect of Job Loss and Unemployment Insurance on Crime in Brazil," Econometrica, Econometric Society, vol. 90(4), pages 1393-1423, July.
    7. Leah Platt Boustan & Jiwon Choi & David Clingingsmith, 2024. "The Political Fallout of Machine Tool Automation in the Mid-20th Century United States," NBER Chapters, in: The Economic History of American Inequality: New Evidence and Perspectives, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Crime; Plant closure; Plant downsizing; Displacement;
    All these keywords.

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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