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Crime and benefit sanctions

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  • Machin, Stephen
  • Marie, Olivier

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.

Suggested Citation

  • Machin, Stephen & Marie, Olivier, 2004. "Crime and benefit sanctions," LSE Research Online Documents on Economics 19945, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:19945
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    File URL: http://eprints.lse.ac.uk/19945/
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    References listed on IDEAS

    as
    1. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," Working Papers 680, Princeton University, Department of Economics, Industrial Relations Section..
    2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    3. 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.
    4. Machin, Stephen & Alan Manning & Lupin Rahman, 2003. "Where Minimum Wage Bites Hard: The Introduction of the UK National Minimum Wage to a Low Wage Sector," Royal Economic Society Annual Conference 2003 145, Royal Economic Society.
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    8. 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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    10. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
    11. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
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    Citations

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    Cited by:

    1. Olivier Marie, 2005. "Reducing Crime: More Police, More Prisons or More Pay?," CEP Election Analysis Papers 002, Centre for Economic Performance, LSE.
    2. 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.
    3. 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.
    4. 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].
    5. Torben Tranaes, 2015. "Active labor market policies and crime," IZA World of Labor, Institute for the Study of Labor (IZA), pages 185-185, September.
    6. David B. Mustard, 2010. "Labor Markets and Crime: New Evidence on an Old Puzzle," Chapters,in: Handbook on the Economics of Crime, chapter 14 Edward Elgar Publishing.
    7. Bindler, Anna, 2016. "Still unemployed, what next? Crime and unemployment duration," Working Papers in Economics 660, University of Gothenburg, Department of Economics.
    8. Mustard, David B., 2010. "How Do Labor Markets Affect Crime? New Evidence on an Old Puzzle," IZA Discussion Papers 4856, Institute for the Study of Labor (IZA).
    9. Jesús María Cárdenas & Néstor Juan Sanabria, 2013. "Reflexiones en torno a la economía del delito," DIMENSIÓN EMPRESARIAL, UNIVERSIDAD AUTONOMA DEL CARIBE, November.
    10. 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 for the Study of Labor (IZA).
    11. repec:iza:izawol:journl:y:2015:p:185 is not listed on IDEAS
    12. Olmo Silva, 2004. "Entrepreneurship: Can the Jack-of-All-Trades Attitude be Aquired?," CEP Discussion Papers dp0665, Centre for Economic Performance, LSE.

    More about this item

    Keywords

    Crime; Benefit Sanctions; Jobseekers allowance;

    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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