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Crime, Ethics and Occupational Choice: Endogenous Sorting in a Closed Model

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  • John P. Conley

    ()
    (Department of Economics, Vanderbilt University)

  • Ping Wang

    ()
    (Vanderbilt University and NBER)

Abstract

We consider a simple model in which agents are endowed with heterogeneous abilities and differing degrees of honesty. Agents choose either to become criminals or invest in education and become workers instead. The model is closed in that all criminal proceeds are stolen from agents working in the formal sector and that expenditures on both deterrence and punishment of criminals are paid for through taxes levied on workers. Thus, although we assume that there no direct interactive effects among criminals, criminals crowd each other in two ways: positively in that enforcement and punishment resources become more widely diffused as more agents commit crimes, and negatively in that the presence of more criminals implies that there is less loot to be divided over a larger number of thieves. We establish the possibility of multiple equilibria and characterize the equilibrium properties. We then evaluate the effectiveness of deterrence policies under a balanced government budget.

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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0402.

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Date of creation: Jan 2004
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Handle: RePEc:van:wpaper:0402

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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Keywords: Criminal Behavior; Educational Choice; Punishment;

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References

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  1. Kenneth Burdett & Ricardo Lagos & Randall Wright, 2002. "Crime, Inequality, and Unemployment, Second Version," PIER Working Paper Archive 03-029, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Sep 2003.
  2. Sah, R.K., 1990. "Social Osmosis And Patterns Of Crime: A Dynamic Economic Analysis," Papers, Yale - Economic Growth Center 609, Yale - Economic Growth Center.
  3. Imrohoroglu, Ayse & Merlo, Antonio & Rupert, Peter, 2000. "On the Political Economy of Income Redistribution and Crime," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 1-25, February.
  4. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2004. "What Accounts For The Decline In Crime?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 707-729, 08.
  5. Chien-Chieh Huang & Derek Laing & Ping Wang, 2004. "Crime And Poverty: A Search-Theoretic Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 909-938, 08.
  6. Ann Dryden Witte & Helen Tauchen, 1994. "Work and Crime: An Exploration Using Panel Data," NBER Working Papers 4794, National Bureau of Economic Research, Inc.
  7. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 507-48, May.
  8. Eric Rasmusen, 1995. "``Stigma and Self-Fulfilling Expectations of Criminality''," Law and Economics, EconWPA 9506001, EconWPA.
  9. Jeff Grogger, 1997. "Market Wages and Youth Crime," NBER Working Papers 5983, National Bureau of Economic Research, Inc.
  10. Freeman, Scott & Grogger, Jeffrey & Sonstelie, Jon, 1996. "The Spatial Concentration of Crime," Journal of Urban Economics, Elsevier, vol. 40(2), pages 216-231, September.
  11. Davis, Michael L, 1988. "Time and Punishment: An Intertemporal Model of Crime," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(2), pages 383-90, April.
  12. Witte, Ann D & Tauchen, Helen, 1994. "Work and Crime: An Exploration Using Panel Data," Public Finance = Finances publiques, , , vol. 49(Supplemen), pages 155-67.
  13. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 76, pages 169.
  14. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(3), pages 521-65, May-June.
  15. Block, M K & Heineke, J M, 1975. "A Labor Theoretic Analysis of the Criminal Choice," American Economic Review, American Economic Association, American Economic Association, vol. 65(3), pages 314-25, June.
  16. Lochner, L., 1999. "Education, Work, and Crime: Theory and Evidence," RCER Working Papers 465, University of Rochester - Center for Economic Research (RCER).
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Cited by:
  1. Emrah Arbak, 2005. "Social status and crime," Working Papers, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure 0510, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.

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