scholarly journals Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms

Author(s):  
Patrick Bennett ◽  
Amine Ouazad

2019 ◽  
Vol 18 (5) ◽  
pp. 2182-2220
Author(s):  
Patrick Bennett ◽  
Amine Ouazad

Abstract This paper estimates the individual impact of a worker’s job loss on his/her criminal activity. Using a matched employer–employee longitudinal data set on unemployment, crime, and taxes for all residents in Denmark, the paper builds each worker’s timeline of job separation, unemployment, and crime. The paper focuses on displaced workers: high-tenure workers who lose employment during a mass-layoff event at any point between 1990 and 1994 (inclusive). Controlling for municipality- and time-specific confounders identifies the individual impact separately from the aggregate impact of the unemployment rate on crime. Placebo tests display no evidence of trends in crime prior to worker separation. Using Denmark’s introduction of the Act on an Active Labor Market at the end of 1993, we estimate the impacts of activation and of a reduction in benefit duration on crime: crime is lower during active benefits than during passive benefits and spikes at the end of benefit eligibility. We use policy-induced shifts in the kink formula relating prior earnings to unemployment benefits to estimate the separate impacts of labor income and unemployment benefits on crime: the results suggest that unemployment benefits do not significantly offset the impact of labor income losses on crime.



1990 ◽  
Vol 37 (2) ◽  
pp. 230-242 ◽  
Author(s):  
Thomas S. Moore
Keyword(s):  


2016 ◽  
Author(s):  
Rossella Mossucca
Keyword(s):  


2017 ◽  
Vol 9 (2) ◽  
pp. 1-31 ◽  
Author(s):  
Pawel Krolikowski

Workers who suffer job displacement experience surprisingly large and persistent earnings losses. This paper proposes an explanation for this robust empirical puzzle in a model of search with a significant job ladder and increased separation rates for the recently hired. In addition to capturing the depth and persistence of displaced worker earnings losses, the model matches: employment-to-nonemployment and employer-to-employer probabilities by tenure; the empirical decomposition of earnings losses into reduced wages and employment; observed wage dispersion; and the distribution of wage changes around a nonemployment event. (JEL J31, J63, J64)





1983 ◽  
Vol 12 (3) ◽  
pp. 393-393
Author(s):  
Catherine Hakim


1979 ◽  
Vol 12 (4) ◽  
pp. 252-253
Author(s):  
Paul R Wilson




2016 ◽  
Vol 43 (4) ◽  
pp. 609-623 ◽  
Author(s):  
Keith Bender ◽  
Ioannis Theodossiou

Purpose Since the literature on the effect of the unemployment rate as reflection of economic fluctuations on crime shows an empirically ambiguous effect, the purpose of this paper is to argue that a new way of modeling the dynamics of unemployment and crime by focussing on the transitory and persistent effect of unemployment on crime helps resolve this ambiguity. Design/methodology/approach Panel data for US states from 1965 to 2006 are examined using the Mundlak (1978) methodology to incorporate the dynamic interactions between crime and unemployment into the estimation. Findings After decomposing the unemployment effect on crime into a transitory and persistent effect, evidence of a strong positive correlation between unemployment and almost all types of crime rates is unearthed. This evidence is robust to endogeneity and the controlling for cross-panel correlation and indicators for state imprisonment. Originality/value The paper is the first to examine the dynamics of the interaction of crime and economic fluctuations using the temporary and persistent effects framework of Mundlak (1978). In one set of estimates, one can evaluation both the short- and long-run effects of changes of unemployment on crime.



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