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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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References

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  1. 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.
  2. 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.
  3. 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.
  4. Richard B. Freeman, 1991. "Crime and the Employment of Disadvantaged Youths," NBER Working Papers 3875, National Bureau of Economic Research, Inc.
  5. Freeman, Richard B. (ed.), 1986. "The Black Youth Employment Crisis," National Bureau of Economic Research Books, University of Chicago Press, number 9780226261645, January.
  6. 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.
  7. 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.
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Citations

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Cited by:
  1. Demir, Firat, 2006. "Volatility of short term capital flows and socio-political instability in Argentina, Mexico and Turkey," MPRA Paper 1943, University Library of Munich, Germany.
  2. Bruce Weinberg & Eric Gould & David Mustard, 1998. "Crime Rates and Local Labor Market Opportunities in the United States: 1979-1995," Working Papers 98-11, Ohio State University, Department of Economics.
  3. Paolo Buonanno, 2006. "Crime, Education and Peer Pressure," Rivista di Politica Economica, SIPI Spa, vol. 96(5), pages 89-110, September.
  4. Huw Lloyd-Ellis & Nicolas Marceau, 1998. "Getting Over the Hump: A Theory of Crime, Credit and Accumulation," Cahiers de recherche CREFE / CREFE Working Papers 65, CREFE, Université du Québec à Montréal.
  5. Paolo Buonanno, 2003. "Identifying the Effect of Education on Crime. Evidence from the Italian Regions," Working Papers 65, University of Milano-Bicocca, Department of Economics, revised Nov 2003.
  6. Paolo Buonanno, 2006. "Crime and Labour Market Opportunities in Italy (1993-2002)," LABOUR, CEIS, vol. 20(4), pages 601-624, December.
  7. Thierry Verdier & Yves Zenou, 2004. "Racial Beliefs, Location, And The Causes Of Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 731-760, 08.
  8. Morris M. Kleiner & Hwikwon Ham, 2002. "Do Industrial Relations Institutions Impact Economic Outcomes?: International and U.S. State-Level Evidence," NBER Working Papers 8729, National Bureau of Economic Research, Inc.
  9. Renata Villoro & Graciela Teruel, 2004. "The social costs of crime in Mexico city and suburban areas," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 19(1), pages 3-44.
  10. Adriano Firmino V. de Araújo & Francisco S. Ramos, 2007. "Estimação Da Perda De Bem-Estar Causada Pela Criminalidade: O Caso Da Cidade De João Pessoa – Pb," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 114, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  11. 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.
  12. H. J. Holzer, . "Employer hiring decisions and antidiscrimination policy," Institute for Research on Poverty Discussion Papers 1085-96, University of Wisconsin Institute for Research on Poverty.
  13. Janet L. Yellen & George A. Akerlof, 2006. "Stabilization Policy: A Reconsideration," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 1-22, January.
  14. Paresh Kumar Narayan & Russell Smyth, 2004. "Crime rates, male youth unemployment and real income in Australia: evidence from Granger causality tests," Applied Economics, Taylor and Francis Journals, vol. 36(18), pages 2079-2095.
  15. Robert W. Fairlie, 2002. "Drug Dealing and Legitimate Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 538-567, July.
  16. Kim, Kwan S., 1997. "Income distribution and poverty: An interregional comparison," World Development, Elsevier, vol. 25(11), pages 1909-1924, November.

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