A feature of many penal codes is that punishments are more severe for repeat offenders, yet economic models have had a hard time providing a theoretical justification for this practice. This paper offers an explanation based on the wage penalty suffered by individuals convicted of crime. While this penalty probably deters some first-timers from committing crimes, it actually hampers deterrence of repeat offenders because of their diminished employments opportunities. We show that in this setting, an escalating penalty scheme is optimal and time consistent.
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number
2004-39.
Length: 13 pages Date of creation: Nov 2004 Date of revision: Handle: RePEc:uct:uconnp:2004-39
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Find related papers by JEL classification: K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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