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Employment, Dynamic Deterrence and Crime

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  • Susumu Imai
  • Kala Krishna

Abstract

Using monthly panel data we solve and estimate, using maximum likelihood techniques, an explicitly dynamic model of criminal behavior where current criminal activity adversely affects future employment outcomes. This acts as 'dynamic deterrence' to crime: the threat of future adverse effects on employment payoffs when caught committing crimes reduces the incentive to commit them. We show that this dynamic deterrence effect is strong in the data. Hence, policies which weaken dynamic deterrence will be less effective in fighting crime. This suggests that prevention is more powerful than redemption since the latter weakens dynamic deterrence as anticipated future redemption allows criminals to look forward to negating the consequences of their crimes. Static models of criminal behavior neglect this and hence sole reliance on them can result in misleading policy analysis.

Suggested Citation

  • Susumu Imai & Kala Krishna, 2001. "Employment, Dynamic Deterrence and Crime," NBER Working Papers 8281, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8281
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    Cited by:

    1. Adolfo Sachsida & Mario Mendonça & Paulo Loureiro & Maria Gutierrez, 2010. "Inequality and criminality revisited: further evidence from Brazil," Empirical Economics, Springer, vol. 39(1), pages 93-109, August.
    2. Dölling, Dieter & Entorf, Horst & Hermann, Dieter & Rupp, Thomas & Woll, Andreas, 2006. "Metaanalyse empirischer Abschreckungsstudien Untersuchungsansatz und erste empirische Befunde," Darmstadt Discussion Papers in Economics 170, Darmstadt University of Technology, Department of Law and Economics.
    3. Carneiro, Francisco Galrao & Loureiro, Paulo R.A. & Sachsida, Adolfo, 2005. "Crime and social interactions: a developing country case study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(3), pages 311-318, May.
    4. Adolfo Sachsida & Mario Jorge C. de Mendonça & Fabio Stallivieri, 2007. "Ex-Convicts Face Multiple Labor Market Punishments: Estimates of Peer-Group and Stigma Effects Using Equations of Returns to Schooling," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 8(3), pages .503-520.
    5. 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.
    6. Loureiro, Paulo R.A. & Mendonça, Mário Jorge Cardoso de & Moreira, Tito Belchior Silva & Sachsida, Adolfo, 2009. "Crime, economic conditions, social interactions and family heritage," International Review of Law and Economics, Elsevier, vol. 29(3), pages 202-209, September.
    7. Lance Lochner, 2004. "Education, Work, And Crime: A Human Capital Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 811-843, August.
    8. Adolfo Sachsida & Mario J. C. Mendonca & Paulo R. A. Loureiro & Antonio Nascimento Junior & Roberto Ellery & Tito Belchior Silva Moreira, 2018. "Crime and Discrimination in the Labor Market: An Empirical Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(3), pages 196-204, March.
    9. Guyonne Kalb & Jenny Williams, 2002. "Industrial Relations Reform and Business Performance: An Introduction," Melbourne Institute Working Paper Series wp2002n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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