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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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  • Panu Poutvaara & Mikael Priks, 2011. "Unemployment and gang crime: can prosperity backfire?," Economics of Governance, Springer, vol. 12(3), pages 259-273, September.
    • Handle: RePEc:spr:ecogov:v:12:y:2011:i:3:p:259-273
    DOI: 10.1007/s10101-011-0094-2
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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. Long, Iain W., 2013. "Recruitment to Organised Crime," Cardiff Economics Working Papers E2013/10, Cardiff University, Cardiff Business School, Economics Section.
    3. 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.
    4. Iain W. Long, 2017. "The Storm Before the Calm? Adverse Effects of Tackling Organized Crime," Manchester School, University of Manchester, vol. 85(5), pages 541-576, September.

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    More about this item

    Keywords

    Violence; Crime; Gangs; Unemployment; K42; D71; D74;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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