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Unemployment and gang crime: can prosperity backfire?

  • Panu Poutvaara

    ()

  • Mikael Priks

    ()

In this paper, we study how unemployment affects gang crime. We examine a model of criminal gangs and suggest that a substitution effect between petty crime and severe crime is at work. In the model, non-monetary valuation of gang membership is private knowledge. Thus, the leaders face a trade-off between less crime per member in large gangs and more crime per member in small gangs. A decrease in unemployment may result in a switch from a large gang that requires petty crime to a small gang that requires severe crime.

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File URL: http://hdl.handle.net/10.1007/s10101-011-0094-2
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Article provided by Springer in its journal Economics of Governance.

Volume (Year): 12 (2011)
Issue (Month): 3 (September)
Pages: 259-273

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Handle: RePEc:spr:ecogov:v:12:y:2011:i:3:p:259-273
DOI: 10.1007/s10101-011-0094-2
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/journal/10101/PS2

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  1. Robert Dur, 2006. "Status-Seeking in Criminal Subcultures and the Double Dividend of Zero-Tolerance," CESifo Working Paper Series 1762, CESifo Group Munich.
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  8. Alan Seals, 2009. "Are Gangs a Substitute for Legitimate Employment? Investigating the Impact of Labor Market Effects on Gang Affiliation," Kyklos, Wiley Blackwell, vol. 62(3), pages 407-425, 08.
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  13. Steven D. Levitt, 2004. "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 163-190, Winter.
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