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Crime and economic incentives

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Author Info
Steve Machin
Costas Meghir () (Institute for Fiscal Studies and University College London)

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Abstract

We explore the role that economic incentives, particularly changes in wages at the bottom end of the wage distribution, play in determining crime rates. We use data on the police force areas of England and Wales between 1975 and 1996. We find that falls in the wages of unskilled workers leads to increases in crime. We carry out a number of experiments with different wage measures, including a wage measure that accounts for the effects of changes in the composition of employment. These reinforce the picture of a strong impact of wages on crime. The result that incentives play a central role is reinforced further by the strong impact on crime of deterrence measures and of a measure of the returns to crime.

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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W00/17.

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Length: 33 pp
Date of creation: Sep 2000
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Handle: RePEc:ifs:ifsewp:00/17

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Reilly, Barry & Robert Witt, 1992. "Crime, deterrence and unemployment in England and Wales: an empirical analysis," Discussion Papers in Economics 12/92, Department of Economics, University of Sussex.
  2. Freeman, Richard B, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter. [Downloadable!] (restricted)
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  3. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May. [Downloadable!] (restricted)
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  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. [Downloadable!] (restricted)
  5. Edward L. Glaeser & Bruce Sacerdote, 1999. "Why Is There More Crime in Cities?," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S225-29, December. [Downloadable!] (restricted)
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  6. Richard Blundell & Howard Reed & Thomas Stoker, 1999. "Interpreting aggregate wage growth," IFS Working Papers W99/13, Institute for Fiscal Studies. [Downloadable!]
  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. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
  9. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January. [Downloadable!] (restricted)
  10. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November. [Downloadable!] (restricted)
  11. Steven D. Levitt, 1998. "Juvenile Crime and Punishment," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1156-1185, December. [Downloadable!] (restricted)
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  12. Witt, Robert & Clarke, Alan & Fielding, Nigel, 1998. "Crime, Earnings Inequality and Unemployment in England and Wales," Applied Economics Letters, Taylor and Francis Journals, vol. 5(4), pages 265-67, April. [Downloadable!] (restricted)
  13. Blundell, Richard & Gosling, Amanda & Ichimura, Hidehiko & Meghir, Costas, 2004. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," IZA Discussion Papers 1350, Institute for the Study of Labor (IZA). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Calvó-Armengol, Antoni & Verdier, Thierry & Zenou, Yves, 2006. "Strong and Weak Ties in Employment and Crime," CEPR Discussion Papers 5448, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. George J. Borjas & Jeffrey Grogger & Gordon H. Hanson, 2006. "Immigration and African-American Employment Opportunities: The Response of Wages, Employment, and Incarceration to Labor Supply Shocks," NBER Working Papers 12518, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Jennifer Hunt, 2003. "Teen Births Keep American Crime High," Discussion Papers of DIW Berlin 343, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  4. Paolo Buonanno, 2003. "The Socioeconomic Determinants of Crime. A Review of the Literature," Working Papers 63, University of Milano-Bicocca, Department of Economics, revised Nov 2003. [Downloadable!]
  5. Lance Lochner, 2004. "Education, Work, and Crime: A Human Capital Approach," NBER Working Papers 10478, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Nilsson, Anna & Agell, Jonas, 2003. "Crime, Unemployment and Labor Market Programs in Turbulent Times," Research Papers in Economics 2003:13, Stockholm University, Department of Economics. [Downloadable!]
  7. Denis Fougère & Francis Kramarz & Julien Pouget, 2006. "Youth Unemployment and Crime in France," IZA Discussion Papers 2009, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Paolo Buonanno & Daniel Montolio Estivill, 2005. "Identifying the Socioeconomic Determinants of Crime in Spanish Provinces," Working Papers in Economics 138, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
  9. Nilsson, Anna, 2004. "Income inequality and crime: The case of Sweden," Working Paper Series 2004:6, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  10. Ziggy MacDonald, 2002. "Official Crime Statistics: Their Use and Interpretation," Economic Journal, Royal Economic Society, vol. 112(477), pages F85-F106, February. [Downloadable!] (restricted)
  11. Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics. [Downloadable!]
  12. Neil Rickman & Robert Witt, 2003. "The determinants of employee crime in the UK," Department of Economics Discussion Papers 0703, Department of Economics, University of Surrey. [Downloadable!]
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  13. Stephen Machin & Olivier Marie, 2004. "Crime and Benefit Sanctions," CEP Discussion Papers dp0645, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  14. Justina A.V. Fischer & Antonio Rodríguez Andrés, 2005. "Is Software Piracy a Middle Class Crime? Investigating the inequality-piracy channel," University of St. Gallen Department of Economics working paper series 2005 2005-18, Department of Economics, University of St. Gallen. [Downloadable!]
  15. Giovanni Gallipoli & Giulio Fella, 2006. "Education and Crime over the Lifecycle," Computing in Economics and Finance 2006 192, Society for Computational Economics. [Downloadable!]
    Other versions:
  16. Nilsson, Anna & Agell, Jonas, 2003. "Crime, unemployment and labor market programs in turbulent times," Working Paper Series 2003:14, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  17. Leo H. Kahane & David Paton & Rob Simmons, 2005. "The Abortion-Crime Link: Evidence from England and Wales," Occasional Papers 16, Industrial Economics Division. [Downloadable!]
    Other versions:
  18. ?gel Solano Garc?, 2004. "Does illegal immigration empower rightist parties?," UFAE and IAE Working Papers 614.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
  19. Demombynes, Gabriel & Ozler, Berk, 2002. "Crime and local inequality in South Africa," Policy Research Working Paper Series 2925, The World Bank. [Downloadable!]
    Other versions:
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