Since 2014
Labor Supply, Criminal Behavior and Income Redistribution
Brazilian Review of Econometrics
View Archive Info| Field | Value | |
| Title |
Labor Supply, Criminal Behavior and Income Redistribution
Labor Supply, Criminal Behavior and Income Redistribution |
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| Creator |
dos Santos, Marcelo Rodrigues; Graduate School of Economics – Getulio Vargas Foundation
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| Subject |
Criminal Behavior; Labor Supply; Income Redistribution
K42; I28 Criminal Behavior; Labor Supply; Income Redistribution K42; I28 |
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| Description |
This paper develops an overlapping generations model of criminal behavior, which extends prior research on crime by taking into account individuals’ labor supply decisions and the stigma effect that affects convicted offenders, lowering their likelihood of employment. I use the model to guide a quantitative assessment of the determinants of crime and of a counterfactual experiment in which an income redistribution policy is thought of as an alternative to greater law enforcement. The model economy considered in this paper is populated by heterogeneous agents who live for a realistic number of periods, have preferences over consumption and leisure, and differ in terms of their age, their skills as well as their employment shocks. In addition, savings may be precautionary and allow partial insurance against the labor income shocks. Because of the lack of full insurance, this model generates an endogenous distribution of wealth across consumers, enabling us to assess the welfare implications of the redistribution policy experiment. I calibrated the model using the U.S. data for 1980 and then used the model to investigate the changes in criminality between 1980 and 1996. The main results of this study are: 1) Law enforcement policy was the the most important factor behind the fall in criminality in the period, while the increase in inequality was the most important single factor promoting crime; 2) Stigmatization is not a free-cost crime control policy; 3) Income redistribution can be a powerful alternative policy to fight crime.
This paper develops an overlapping generations model of criminal behavior, which extends prior research on crime by taking into account individuals’ labor supply decisions and the stigma effect that affects convicted offenders, lowering their likelihood of employment. I use the model to guide a quantitative assessment of the determinants of crime and of a counterfactual experiment in which an income redistribution policy is thought of as an alternative to greater law enforcement. The model economy considered in this paper is populated by heterogeneous agents who live for a realistic number of periods, have preferences over consumption and leisure, and differ in terms of their age, their skills as well as their employment shocks. In addition, savings may be precautionary and allow partial insurance against the labor income shocks. Because of the lack of full insurance, this model generates an endogenous distribution of wealth across consumers, enabling us to assess the welfare implications of the redistribution policy experiment. I calibrated the model using the U.S. data for 1980 and then used the model to investigate the changes in criminality between 1980 and 1996. The main results of this study are: 1) Law enforcement policy was the the most important factor behind the fall in criminality in the period, while the increase in inequality was the most important single factor promoting crime; 2) Stigmatization is not a free-cost crime control policy; 3) Income redistribution can be a powerful alternative policy to fight crime. |
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| Publisher |
Sociedade Brasileira de Econometria
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| Date |
2009-12-01
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
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| Identifier |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/3441
10.12660/bre.v29n22009.3441 |
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| Source |
Brazilian Review of Econometrics; Vol 29, No 2 (2009); 205–233
Brazilian Review of Econometrics; Vol 29, No 2 (2009); 205–233 1980-2447 |
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| Language |
eng
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| Relation |
http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/3441/2208
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