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Unemployment and gang crime: can prosperity backfire?

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  • 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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Related research

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

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References

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  1. Abdalla Mansour & Nicolas Marceau & Steeve Mongrain, 2001. "Gangs and Crime Deterrence," Cahiers de recherche CREFE / CREFE Working Papers, CREFE, Université du Québec à Montréal 138, CREFE, Université du Québec à Montréal.
  2. 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.
  3. Robert Dur & Joël Van Der Weele, 2013. "Status-Seeking in Criminal Subcultures and the Double Dividend of Zero-Tolerance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(1), pages 77-93, 02.
  4. Fougère, Denis & Kramarz, Francis & Pouget, Julien, 2006. "Youth Unemployment and Crime in France," IZA Discussion Papers 2009, Institute for the Study of Labor (IZA).
  5. 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.
  6. 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.
  7. Stigler, George J, 1970. "The Optimum Enforcement of Laws," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 78(3), pages 526-36, May-June.
  8. Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May.
  9. 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.
  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. 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.
  12. Stergios Skaperdas, 2001. "The political economy of organized crime: providing protection when the state does not," Economics of Governance, Springer, Springer, vol. 2(3), pages 173-202, November.
  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. Poret, Sylvaine, 2002. "Paradoxical effects of law enforcement policies: the case of the illicit drug market," International Review of Law and Economics, Elsevier, Elsevier, vol. 22(4), pages 465-493, December.
  15. Neher, Philip A, 1978. "The Pure Theory of the Muggery," American Economic Review, American Economic Association, vol. 68(3), pages 437-45, June.
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Citations

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Cited by:
  1. Seals, Richard Alan & Stern, Liliana V., 2013. "Cognitive ability and the division of labor in urban ghettos: Evidence from gang activity in U.S. data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 140-149.
  2. 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.

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