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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 workin this area. We look at changes in unemployment benefits and the imposition of benefit sanctions as a means ofstudying the way that people on the margins of crime may react to economic incentives. The paper relies on aquasiexperimental setting induced by the introduction of the Jobseekers Allowance (JSA) in the UK in October1996. We look at crime rates in areas more and less affected by the policy change before and after JSAintroduction. In the areas more affected by the tougher benefit regime crime rose by more. These were also theareas with higher outflows from unemployment and particularly to people dropping off the register but not intowork, education/training or onto other benefits. Areas that had more sanctioned individuals also experiencedhigher crime rates after the introduction of JSA. As such the benefit cuts and sanctions embodied in the JSAappear to have induced individuals previously on the margins to engage in crime. Thus there appears to havebeen an unintended policy consequence, associated with the benefit reform, namely higher crime.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0645.

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Date of creation: Aug 2004
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Handle: RePEc:cep:cepdps:dp0645

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Crime; Benefit Sanctions; Jobseekers allowance;

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References

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  1. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  2. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
  3. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-91, October.
  4. 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.
  5. Stephen Machin & Alan Manning, 1998. "The Causes and Consequences of Long-Term Unemployment in Europe," CEP Discussion Papers dp0400, Centre for Economic Performance, LSE.
  6. 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.
  7. 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.
  8. Steve Machin & Costas Meghir, 2000. "Crime and economic incentives," IFS Working Papers W00/17, Institute for Fiscal Studies.
  9. repec:fth:prinin:300 is not listed on IDEAS
  10. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
  11. 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.
  12. 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.
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Cited by:
  1. 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).
  2. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, 09.
  3. John Van Reenen, 2005. "Welfare to work: the evidence on Labour’s new deal policies," LSE Research Online Documents on Economics 4672, London School of Economics and Political Science, LSE Library.
  4. Olmo Silva, 2004. "Entrepreneurship: Can the Jack-of-All-Trades Attitude be Aquired?," CEP Discussion Papers dp0665, Centre for Economic Performance, LSE.
  5. Olivier Marie, 2005. "Reducing Crime: More Police, More Prisons or More Pay?," CEP Election Analysis Papers 002, Centre for Economic Performance, LSE.

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