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Workplace Deviance and Recession

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  • Bagchi Aniruddha

    () (Coles College of Business, Kennesaw State University, Kennesaw, GA 30144, USA)

  • Bandyopadhyay Siddhartha

    () (Department of Economics, University of Birmingham, Birmingham B152TT, UK)

Abstract

We examine the relationship between the incidence of workplace deviance (on-the-job crime) and the state of the economy. A worker’s probability of future employment depends on whether she has been deviant as well as on the availability of jobs. Using a two period model we show that the net impact on deviant behavior to changes in unemployment can go either way depending upon the nature of the equilibrium. Two kinds of equilibria are possible. In one, a non-deviant’s probability of being employed increases as expected market conditions improve which lowers the incentive to be a deviant. In contrast, in the other kind of equilibrium, the deviant’s probability of being employed increases when market conditions improve which increases the incentive to be a deviant. In either case, there is a setup cost to deviant behavior and the attractiveness of incurring that increases with an increase in expected probability of future employment which unambiguously increases the incentive to be deviant. In the first kind of equilibrium, the two effects counteract each other, while in the second they reinforce each other. Finally, we characterize conditions under which an increase in optimism, i.e. a reduction in the probability of facing a recession unambiguously increases deviant behavior.

Suggested Citation

  • Bagchi Aniruddha & Bandyopadhyay Siddhartha, 2016. "Workplace Deviance and Recession," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(1), pages 47-81, January.
    • Handle: RePEc:bpj:bejtec:v:16:y:2016:i:1:p:47-81:n:3
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    References listed on IDEAS

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    1. Wadhwani, Sushil B & Wall, Martin, 1991. "A Direct Test of the Efficiency Wage Model Using UK Micro-data," Oxford Economic Papers, Oxford University Press, vol. 43(4), pages 529-548, October.
    2. Lu Han & Siddhartha Bandyopadhyay & Samrat Bhattacharya, 2013. "Determinants of violent and property crimes in England and Wales: a panel data analysis," Applied Economics, Taylor & Francis Journals, vol. 45(34), pages 4820-4830, December.
    3. Joanne M. Doyle & Ehsan Ahmed & Robert N. Horn, 1999. "The Effects of Labor Markets and Income Inequality on Crime: Evidence from Panel Data," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 717-738, April.
    4. Drago, Robert & Heywood, John S, 1992. "Is Worker Behaviour Consistent with Efficiency Wages?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(2), pages 141-153, May.
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