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

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Author Info
John P. Conley () (Department of Economics, Vanderbilt University)
Ping Wang () (Vanderbilt University and NBER)

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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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File URL: http://www.vanderbilt.edu/Econ/wparchive/workpaper/vu04-w02.pdf
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File Function: First version, 2004
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Publisher Info
Paper provided by Department of Economics, Vanderbilt University in its series 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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Related research
Keywords: Criminal Behavior Educational Choice Punishment

Find related papers by JEL classification:
I2 - Health, Education, and Welfare - - Education
J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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References listed on IDEAS
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  1. Block, M K & Heineke, J M, 1975. "A Labor Theoretic Analysis of the Criminal Choice," American Economic Review, American Economic Association, vol. 65(3), pages 314-25, June. [Downloadable!] (restricted)
  2. Ann Dryden Witte & Helen Tauchen, 1994. "Work and Crime: An Exploration Using Panel Data," NBER Working Papers 4794, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  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, vol. 41(1), pages 1-25, February.
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  4. Freeman, Scott & Grogger, Jeffrey & Sonstelie, Jon, 1996. "The Spatial Concentration of Crime," Journal of Urban Economics, Elsevier, vol. 40(2), pages 216-231, September. [Downloadable!] (restricted)
  5. Kenneth Burdett & Ricardo Lagos & Randall Wright, 2003. "Crime, Inequality, and Unemployment," American Economic Review, American Economic Association, vol. 93(5), pages 1764-1777, December. [Downloadable!] (restricted)
  6. 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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  7. 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)
  8. Davis, Michael L, 1988. "Time and Punishment: An Intertemporal Model of Crime," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 383-90, April. [Downloadable!] (restricted)
  9. 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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  10. 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, vol. 45(3), pages 909-938, 08. [Downloadable!] (restricted)
  11. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
  12. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2000. "What accounts for the decline in crime?," Working Paper 0008, Federal Reserve Bank of Cleveland. [Downloadable!]
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  13. Rasmusen, Eric, 1996. "Stigma and Self-Fulfilling Expectations of Criminality," Journal of Law & Economics, University of Chicago Press, vol. 39(2), pages 519-43, October.
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  14. Lochner, L., 1999. "Education, Work, and Crime: Theory and Evidence," RCER Working Papers 465, University of Rochester - Center for Economic Research (RCER). [Downloadable!]
  15. Sah, Raaj K, 1991. "Social Osmosis and Patterns of Crime," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1272-95, December. [Downloadable!] (restricted)
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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. Emrah Arbak, 2005. "Social status and crime," Working Papers 0510, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
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