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Crime and Benefit Sanctions

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Author Info
Stephen Machin
Olivier Marie

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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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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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Related research
Keywords: Crime; Benefit Sanctions; Jobseekers allowance;

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Find related papers by JEL classification:
H00 - Public Economics - - General - - - General
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

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References listed on IDEAS
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  1. 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. [Downloadable!]
  2. repec:fth:prinin:300 is not listed on IDEAS
  3. 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.. [Downloadable!]
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  4. Steve Machin & Costas Meghir, 2000. "Crime and economic incentives," IFS Working Papers W00/17, Institute for Fiscal Studies. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-91, October. [Downloadable!] (restricted)
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  8. 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. [Downloadable!] (restricted)
  9. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
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  10. Stephen Machin & Alan Manning, 1998. "The Causes and Consequences of Long-Term Unemployment in Europe," CEP Discussion Papers dp0400, Centre for Economic Performance, LSE. [Downloadable!]
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