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Crime and Economic Incentives

Listed author(s):
  • 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)

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.

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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080614-115808
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Article provided by Annual Reviews in its journal Annual Review of Economics.

Volume (Year): 7 (2015)
Issue (Month): 1 (August)
Pages: 389-408

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Handle: RePEc:anr:reveco:v:7:y:2015:p:389-408
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  15. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
  16. Freeman, Richard B., 1999. "The economics of crime," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 52, pages 3529-3571 Elsevier.
  17. Richard Blundell & Howard Reed & Thomas M. Stoker, 1999. "Interpreting aggregate wage growth," IFS Working Papers W99/13, Institute for Fiscal Studies.
  18. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
  19. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January.
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