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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
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