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Crime and the Job Market

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  • Richard B. Freeman

Abstract

This paper presents evidence on the relation among incarceration, crime, and the economic incentives to crime, ranging from unemployment to income inequality. It makes three points: 1) The U.S. has incarcerated an extraordinarily high proportion of men of working age overall, and among blacks. In 1993 the number incarcerated was 1.9 percent of the male work force; among blacks, the number incarcerated was 8.8 percent of the work force. 2) The rising trend in incarceration should have reduced the rate of crime, through the incapacitation of criminals and through the deterrent effect of potential arrest and imprisonment. But administrative records show no such drop in crime and the victims survey shows a fall far below what could be expected on the basis of incapacitation by itself. 3) The implication is that there was an increased propensity to commit crime among the non-institutional population. The paper focuses attention on the possibility that the continued high rate of crime in the U.S., despite massive imprisonment of criminals may be one of the costs of the rising inequality in the country, and in particular of the falling real earnings of the less educated. While we lack a 'smoking gun' for such a relation, the preponderance of evidence suggests that economic incentives have played a role in the increased propensity to commit crime.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4910.

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Date of creation: Oct 1994
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Handle: RePEc:nbr:nberwo:4910

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  1. W. Kip Viscusi, 1986. "Market Incentives for Criminal Behavior," NBER Chapters, in: The Black Youth Employment Crisis, pages 301-351 National Bureau of Economic Research, Inc.
  2. Richard Freeman, 1987. "The relation of criminal activity to black youth employment," The Review of Black Political Economy, Springer, vol. 16(1), pages 99-107, June.
  3. Witte, Ann Dryden, 1980. "Estimating the Economic Model of Crime with Individual Data," The Quarterly Journal of Economics, MIT Press, vol. 94(1), pages 57-84, February.
  4. Grogger, Jeffrey, 1995. "The Effect of Arrests on the Employment and Earnings of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 51-71, February.
  5. Freeman, Richard B. & Holzer, Harry J. (ed.), 1986. "The Black Youth Employment Crisis," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226261645.
  6. Sjoquist, David Lawrence, 1973. "Property Crime and Economic Behavior: Some Empirical Results," American Economic Review, American Economic Association, vol. 63(3), pages 439-46, June.
  7. Richard B. Freeman, 1991. "Crime and the Employment of Disadvantaged Youths," NBER Working Papers 3875, National Bureau of Economic Research, Inc.
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