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Crime and benefit sanctions

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  • Stephen Machin

    ()

  • Olivier Marie

Abstract

In this paper we look at the relationship between crime and economic incentives in a different way to other work in this area. We look at changes in unemployment benefits and the imposition of benefit sanctions as a means of studying the way that people on the margins of crime may react to economic incentives. The paper relies on a quasiexperimental setting induced by the introduction of the Jobseekers Allowance (JSA) in the UK in October 1996. We look at crime rates in areas more and less affected by the policy change before and after JSA introduction. In the areas more affected by the tougher benefit regime crime rose by more. These were also the areas with higher outflows from unemployment and particularly to people dropping off the register but not into work, education/training or onto other benefits. Areas that had more sanctioned individuals also experienced higher crime rates after the introduction of JSA. As such the benefit cuts and sanctions embodied in the JSA appear to have induced individuals previously on the margins to engage in crime. Thus there appears to have been an unintended policy consequence, associated with the benefit reform, namely higher crime.

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Bibliographic Info

Article provided by Springer in its journal Portuguese Economic Journal.

Volume (Year): 5 (2006)
Issue (Month): 2 (August)
Pages: 149-165

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Handle: RePEc:spr:portec:v:5:y:2006:i:2:p:149-165

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Related research

Keywords: Crime; Benefit sanctions; Jobseekers allowance; JEL Classification H00; J65;

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References

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  1. Steve Machin & Costas Meghir, 2000. "Crime and economic incentives," IFS Working Papers W00/17, Institute for Fiscal Studies.
  2. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," NBER Working Papers 4058, National Bureau of Economic Research, Inc.
  3. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  4. Jeff Grogger, 1997. "Market Wages and Youth Crime," NBER Working Papers 5983, National Bureau of Economic Research, Inc.
  5. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
  6. repec:fth:prinin:300 is not listed on IDEAS
  7. Machin, Stephen & Alan Manning & Lupin Rahman, 2003. "Where Minimum Wage Bites Hard: The Introduction of the UK National Minimum Wage to a Low Wage Sector," Royal Economic Society Annual Conference 2003 145, Royal Economic Society.
  8. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
  9. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
  10. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June.
  11. Stephen Machin & Alan Manning, 1998. "The Causes and Consequences of Long-Term Unemployment in Europe," CEP Discussion Papers dp0400, Centre for Economic Performance, LSE.
  12. Freeman, Richard B., 1999. "The economics of crime," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 52, pages 3529-3571 Elsevier.
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Citations

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Cited by:
  1. Fougère, Denis & Kramarz, Francis & Pouget, Julien, 2006. "Youth Unemployment and Crime in France," IZA Discussion Papers 2009, Institute for the Study of Labor (IZA).
  2. John Van Reenen, 2005. "Welfare to Work: The Evidence on Labour’s New Deal Policies," CEP Election Analysis Papers 000, Centre for Economic Performance, LSE.
  3. Olmo Silva, 2004. "Entrepreneurship: Can the Jack-of-All-Trades Attitude be Aquired?," CEP Discussion Papers dp0665, Centre for Economic Performance, LSE.
  4. Olivier Marie, 2005. "Reducing Crime: More Police, More Prisons or More Pay?," CEP Election Analysis Papers 002, Centre for Economic Performance, LSE.
  5. Mustard, David B., 2010. "How Do Labor Markets Affect Crime? New Evidence on an Old Puzzle," IZA Discussion Papers 4856, Institute for the Study of Labor (IZA).

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