On the Role of Social Capital in Youth Crime: A Dynamic Structural Approach
AbstractWe study criminality in a dynamic context by introducing social capital into the economic theory of crime. Social capital measures the extent to which an individual is bonded to legitimate society. According to the social control perspective. bonds to society strengthen as the individual ages, increasing the cost of deviant behaviof, making criminal acts less likely. This hypothesis is consistent with the temporal patlern displayed in aggregate arrest data. We empirically implement our model using panel data on a sample representative of young men in urban areas of the United States. Estimation is complicated by an omitled regressor problem, which arises because choices in future states not realized, are unobserved. We resolve this issue by replacing the unobservables with Monte Carlo draws from the conditional empirical distribution of observed outcomes and using a Method of Simulated Moments estimator. Our results provide evidence in support of a social capital theory of crime. We find that social capital affects both preferences and earnings in the legitimate sector. Further, as predicted by social control theory. social capital becomes increasingly important over the Iife-cQurse. This raises the cost associated with crime. making its occurrence less likely.
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Bibliographic InfoPaper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 1998-02.
Length: 40 pages
Date of creation: 1998
Date of revision:
human capital; crimes; dynamic analysis; panel data; simulated method of moments;
Find related papers by JEL classification:
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
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- Entorf, Horst & Spengler, Hannes, 1998.
"Socio-economic and demographic factors of crime in Germany: evidence from panel data of the German states,"
ZEW Discussion Papers
98-16, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
- Entorf, Horst & Spengler, Hannes, 2000. "Development and validation of scientific indicators of the relationship between criminality, social cohesion and economic performance," ZEW Dokumentationen 00-05, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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