Poverty traps, economic inequality and delinquent incentives
This paper explores theoretical linkages between poverty traps, economic inequality and delinquency in a two sector overlapping generations model under perfect competition in which barriers to skilled educational attainment and delinquent incentives interact. We find that the existence of a poverty trap under high economic inequality and costly indivisible human capital investments generate persistent delinquency. We study shocks that increase skilled wages or reduce assets for the unskilled and find that these temporal shocks produce an outburst of delinquency in the short run that die out later on. If the shock is permanent then delinquency increases permanently in the long run. Furthermore, we find that when law enforcement policies increase deterrence and incapacitation permanently delinquency dimineshes en the long run but is accompanied by an increase in wealth inequality. We also find that subsidies for human capital investments can have an ambiguous effect on delinquency in the long run.
|Date of creation:||31 Jan 2010|
|Date of revision:|
|Contact details of provider:|| |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lance Lochner, 2010.
"Education Policy and Crime,"
University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers
20102, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
When requesting a correction, please mention this item's handle: RePEc:col:000416:008214. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jorge Alberto Restrepo)
If references are entirely missing, you can add them using this form.