IDEAS home Printed from
   My bibliography  Save this paper

Poverty traps, economic inequality and delinquent incentives


  • Edgar Villa


  • Andres Salazar


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.

Suggested Citation

  • Edgar Villa & Andres Salazar, 2010. "Poverty traps, economic inequality and delinquent incentives," Vniversitas Económica 008214, Universidad Javeriana - Bogotá.
  • Handle: RePEc:col:000416:008214

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lance Lochner, 2010. "Education Policy and Crime," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 465-515, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Poverty Traps; Inequality; Delinquency; Human Capital;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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: (Mayerly Galindo Rodriguez). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.