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Crime and benefit sanctions

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  • Stephen Machin
  • Olivier Marie

Abstract

In this paper we look at the relationship between crime and economic incentives in a different way to other work in this area. We look at changes in unemployment benefits and the imposition of benefit sanctions as a means of studying the way that people on the margins of crime may react to economic incentives. The paper relies on a quasiexperimental setting induced by the introduction of the Jobseekers Allowance (JSA) in the UK in October 1996. We look at crime rates in areas more and less affected by the policy change before and after JSA introduction. In the areas more affected by the tougher benefit regime crime rose by more. These were also the areas with higher outflows from unemployment and particularly to people dropping off the register but not into work, education/training or onto other benefits. Areas that had more sanctioned individuals also experienced higher crime rates after the introduction of JSA. As such the benefit cuts and sanctions embodied in the JSA appear to have induced individuals previously on the margins to engage in crime. Thus there appears to have been an unintended policy consequence, associated with the benefit reform, namely higher crime.
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Suggested Citation

  • Stephen Machin & Olivier Marie, 2006. "Crime and benefit sanctions," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 5(2), pages 149-165, August.
  • Handle: RePEc:spr:portec:v:5:y:2006:i:2:p:149-165
    DOI: 10.1007/s10258-006-0010-9
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    1. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139, Elsevier.
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    7. Machin, Stephen & Manning, Alan & Rahman, Lupin, 2002. "Where the minimum wage bites hard: the introduction of the UK national minimum wage to a low wage sector," LSE Research Online Documents on Economics 20070, London School of Economics and Political Science, LSE Library.
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    9. 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.
    10. Brand, Sam & Price, Richard, 2000. "The economic and social costs of crime," MPRA Paper 74968, University Library of Munich, Germany.
    11. Stephen Machin & Alan Manning & Lupin Rahman, 2003. "Where the Minimum Wage Bites Hard: Introduction of Minimum Wages to a Low Wage Sector," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 154-180, March.
    12. 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.
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    Cited by:

    1. Van Reenen, John, 2005. "Welfare to work: the evidence on Labour’s new deal policies," LSE Research Online Documents on Economics 4672, London School of Economics and Political Science, LSE Library.
    2. Berg, Gerard J. van den & Uhlendorff, Arne & Wolff, Joachim, 2015. "Under heavy pressure : intense monitoring and accumulation of sanctions for young welfare recipients in Germany," IAB-Discussion Paper 201534, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. d'Este, Rocco & Harvey, Alex, 2020. "Universal Credit and Crime," IZA Discussion Papers 13484, Institute of Labor Economics (IZA).
    4. R Pickering & K Y Lim, 2024. "Does crime type matter in understanding the nexus between universal credit and crime? Evidence from England and Wales," Economic Issues Journal Articles, Economic Issues, vol. 29(1), pages 93-131, March.
    5. Gerard J. van den Berg & Arne Uhlendorff & Joachim Wolff, 2022. "The Impact of Sanctions for Young Welfare Recipients on Transitions to Work and Wages, and on Dropping Out," Economica, London School of Economics and Political Science, vol. 89(353), pages 1-28, January.
    6. Corrado Giulietti & Brendon McConnell, 2020. "Kicking You When You're Already Down: The Multipronged Impact of Austerity on Crime," Papers 2012.08133, arXiv.org, revised Aug 2022.
    7. Hohenleitner, Ingrid & Hillmann, Katja, 2019. "Impact of welfare sanctions on the quality of subsequent employment: Wages, incomes, and employment stability," HWWI Research Papers 190, Hamburg Institute of International Economics (HWWI).
    8. Pablo Acosta & Emma Monsalve Montiel, 2021. "Public works programs and crime: Evidence for El Salvador," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1778-1793, August.
    9. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, September.
    10. Torben Tranaes, 2015. "Active labor market policies and crime," IZA World of Labor, Institute of Labor Economics (IZA), pages 185-185, September.
    11. Long, Iain W. & Polito, Vito, 2014. "Unemployment, Crime and Social Insurance," Cardiff Economics Working Papers E2014/9, Cardiff University, Cardiff Business School, Economics Section.
    12. Bindler, Anna, 2016. "Still unemployed, what next? Crime and unemployment duration," Working Papers in Economics 660, University of Gothenburg, Department of Economics.
    13. Olivier Marie, 2005. "Reducing Crime: More Police, More Prisons or More Pay?," CEP Election Analysis Papers 002, Centre for Economic Performance, LSE.
    14. Mustard, David B., 2010. "How Do Labor Markets Affect Crime? New Evidence on an Old Puzzle," IZA Discussion Papers 4856, Institute of Labor Economics (IZA).
    15. Fallesen, Peter & Geerdsen, Lars Pico & Imai, Susumu & Tranæs, Torben, 2014. "The Effect of Workfare on Crime: Incapacitation and Program Effects," IZA Discussion Papers 8716, Institute of Labor Economics (IZA).
    16. Rudolph, Maximilian & Starke, Peter, 2020. "How does the welfare state reduce crime? The effect of program characteristics and decommodification across 18 OECD-countries," Journal of Criminal Justice, Elsevier, vol. 68(C).
    17. Shiyun Zhang, 2022. "Immigration and Crime in Frictional Labor Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 44, pages 152-183, April.
    18. David B. Mustard, 2010. "Labor Markets and Crime: New Evidence on an Old Puzzle," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 14, Edward Elgar Publishing.
    19. Jesús María Cárdenas & Néstor Juan Sanabria, 2013. "Reflexiones en torno a la economía del delito," Dimensión Empresarial, Universidad Autónoma del Caribe, November.
    20. repec:iza:izawol:journl:y:2015:p:185 is not listed on IDEAS
    21. Andrew Wright & Brian Dollery & Michael Kortt & Shawn Leu, 2020. "Examining the Effects of Zero‐Dollar Unemployment Payment Sanctions," The Economic Record, The Economic Society of Australia, vol. 96(315), pages 490-505, December.
    22. Olmo Silva, 2004. "Entrepreneurship: Can the Jack-of-All-Trades Attitude be Aquired?," CEP Discussion Papers dp0665, Centre for Economic Performance, LSE.

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    More about this item

    Keywords

    Crime; Benefit sanctions; Jobseekers allowance; JEL Classification H00; J65;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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