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Crime and Economic Incentives

Author

Listed:
  • Mirko Draca

    (Department of Economics, University of Warwick, Coventry CV4 7AL, United Kingdom
    Centre for Economic Performance, London School of Economics, London WC2A 2AE, United Kingdom)

  • Stephen Machin

    (Centre for Economic Performance, London School of Economics, London WC2A 2AE, United Kingdom
    Department of Economics, University College London, London WC1E 6BT, United Kingdom)

Abstract

In economic models of crime, changing economic incentives alter the participation of individuals in criminal activities. We critically appraise the work in this area. After a brief overview of the workhorse economics of crime model for organizing our discussion on crime and economic incentives, we first document the significant rise of the economics of crime as a research field and then go on to review the evidence on the relationship between crime and economic incentives. We divide this discussion into incentives operating through legal wages in the formal labor market and the economic returns to illegal activities. Evidence that economic incentives matter for crime emerges from both.

Suggested Citation

  • Mirko Draca & Stephen Machin, 2015. "Crime and Economic Incentives," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 389-408, August.
  • Handle: RePEc:anr:reveco:v:7:y:2015:p:389-408
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080614-115808
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    References listed on IDEAS

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    More about this item

    Keywords

    crime; incentives; labor market opportunities; returns to crime;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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