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Unemployment and gang crime: can prosperity backfire?

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Author Info

  • Panu Poutvaara

    ()

  • Mikael Priks

    ()

Abstract

In this paper, we study how unemployment affects gang crime. We examine a model of criminal gangs and suggest that a substitution effect between petty crime and severe crime is at work. In the model, non-monetary valuation of gang membership is private knowledge. Thus, the leaders face a trade-off between less crime per member in large gangs and more crime per member in small gangs. A decrease in unemployment may result in a switch from a large gang that requires petty crime to a small gang that requires severe crime.

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File URL: http://hdl.handle.net/10.1007/s10101-011-0094-2
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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 12 (2011)
Issue (Month): 3 (September)
Pages: 259-273

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Handle: RePEc:spr:ecogov:v:12:y:2011:i:3:p:259-273

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Web page: http://link.springer.de/link/service/journals/10101/index.htm

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Related research

Keywords: Violence; Crime; Gangs; Unemployment; K42; D71; D74;

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References

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  1. Dur, Robert & van der Weele, Joël, 2011. "Status-Seeking in Criminal Subcultures and the Double Dividend of Zero-Tolerance," IZA Discussion Papers 5484, Institute for the Study of Labor (IZA).
  2. Raphael, Steven & WINTER-EBMER, RUDOLF, 1998. "Identifying the Effect of Unemployment on Crime," University of California at San Diego, Economics Working Paper Series qt5hb4h56g, Department of Economics, UC San Diego.
  3. Alan Seals, 2009. "Are Gangs a Substitute for Legitimate Employment? Investigating the Impact of Labor Market Effects on Gang Affiliation," Kyklos, Wiley Blackwell, vol. 62(3), pages 407-425, 08.
  4. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  5. Denis Fougère & Francis Kramarz & Julien Pouget, 2007. "Youth Unemployment and Crime in France," Working Papers 2007-33, Centre de Recherche en Economie et Statistique.
  6. Stergios Skaperdas, 2001. "The political economy of organized crime: providing protection when the state does not," Economics of Governance, Springer, vol. 2(3), pages 173-202, November.
  7. Abdala Mansour & Nicolas Marceau & Steeve Mongrain, 2006. "Gangs and Crime Deterrence," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(2), pages 315-339, October.
  8. Panu Poutvaara & Mikael Priks, 2009. "Hooliganism and Police Tactics," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(3), pages 441-453, 06.
  9. Neher, Philip A, 1978. "The Pure Theory of the Muggery," American Economic Review, American Economic Association, vol. 68(3), pages 437-45, June.
  10. Steven D. Levitt, 2004. "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 163-190, Winter.
  11. George J. Stigler, 1974. "The Optimum Enforcement of Laws," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 55-67 National Bureau of Economic Research, Inc.
  12. Poret, Sylvaine, 2002. "Paradoxical effects of law enforcement policies: the case of the illicit drug market," International Review of Law and Economics, Elsevier, vol. 22(4), pages 465-493, December.
  13. Antony W. Dnes & Nuno Garoupa, 2010. "Behavior, Human Capital and the Formation of Gangs," Kyklos, Wiley Blackwell, vol. 63(4), pages 517-529, November.
  14. Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May.
  15. Janus, Thorsten & Lim, Jamus Jerome, 2009. "Sticks and carrots: Two incentive mechanisms supporting intra-group cooperation," Economics Letters, Elsevier, vol. 102(3), pages 177-180, March.
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Citations

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Cited by:
  1. Friehe, Tim, 2013. "Tempting righteous citizens? Counterintuitive effects of increasing sanctions in the realm of organized crime," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 37-40.
  2. Richard Alan Seals Jr., 2011. "Cognitive Ability and the Division of Labor in Urban Ghettos: Evidence From Gang Activity in U.S. Data," Auburn Economics Working Paper Series auwp2011-03, Department of Economics, Auburn University.

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