Employment, Dynamic Deterrence and Crime

67 Pages Posted: 5 May 2001 Last revised: 22 Oct 2010

See all articles by Susumu Imai

Susumu Imai

Queen's University - Department of Economics

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: May 2001

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

Imai, Susumu and Krishna, Kala, Employment, Dynamic Deterrence and Crime (May 2001). NBER Working Paper No. w8281, Available at SSRN: https://ssrn.com/abstract=268890

Susumu Imai (Contact Author)

Queen's University - Department of Economics ( email )

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Kingston K7L 3N6, Ontario
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HOME PAGE: http://qed.econ.queensu.ca/pub/faculty/imai/

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

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University Park, PA 16802-3306
United States
814-865-1106 (Phone)
814-863-4775 (Fax)

National Bureau of Economic Research (NBER)

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