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Unemployment and gang crime: Can prosperity backfire?

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  • Poutvaara, Panu
  • Priks, Mikael

Abstract

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.

Suggested Citation

  • Poutvaara, Panu & Priks, Mikael, 2011. "Unemployment and gang crime: Can prosperity backfire?," Munich Reprints in Economics 19790, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19790
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    References listed on IDEAS

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    1. Steven D. Levitt, 2004. "Understanding Why Crime Fell in the 1990s: Four Factors that Explain the Decline and Six that Do Not," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 163-190, Winter.
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    Cited by:

    1. Friehe, Tim, 2013. "Tempting righteous citizens? Counterintuitive effects of increasing sanctions in the realm of organized crime," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 37-40.
    2. Seals, Richard Alan & Stern, Liliana V., 2013. "Cognitive ability and the division of labor in urban ghettos: Evidence from gang activity in U.S. data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 140-149.
    3. Iain W. Long, 2017. "The Storm Before the Calm? Adverse Effects of Tackling Organized Crime," Manchester School, University of Manchester, vol. 85(5), pages 541-576, September.
    4. Long, Iain W., 2013. "Recruitment to Organised Crime," Cardiff Economics Working Papers E2013/10, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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