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Crime and the Minimum Wage

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  • Christine Braun

    (University of California Santa Barbara)

Abstract

How does the minimum wage affect crime rates? Empirical research suggests that increasing a worker's wage can deter him from committing crimes. On the other hand, if that worker becomes displaced as a result of the minimum wage, he may be more likely to commit a crime. In this paper, I describe a frictional world in which a worker's criminal actions are linked to his labor market outcomes. I calibrate the model to match the aggregate crime rate and the labor market faced by 16-24 year olds in 1998. Using the calibrated model, I show that the relationship between the aggregate crime rate and the minimum wage is non-monotonic. I test for this non-monotonicity using county level crime data and state level minimum wage changes from 1980 to 2012. The results from the empirical analysis as well as the model suggest that any increase in the federal minimum wage may increase the crime rate as the current wage floor is close the the crime minimizing value.

Suggested Citation

  • Christine Braun, 2017. "Crime and the Minimum Wage," 2017 Meeting Papers 359, Society for Economic Dynamics.
  • Handle: RePEc:red:sed017:359
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    References listed on IDEAS

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    4. Maham Furqan & Haider Mahmood, 2020. "Does education reduce homicide? A panel data analysis of Asian region," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(4), pages 1197-1209, August.

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    More about this item

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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