Employment, Deterrence, and Crime in a Dynamic Model*

Abstract

Using maximum likelihood techniques and monthly panel data we solve and estimate an explicitly dynamic model of criminal behavior where current criminal activity impacts future labor market outcomes. We show that the threat of future adverse effects in the labor market when arrested acts as a strong deterrent to crime. Moreover, such forward-looking behavior is estimated to be important. Hence, policies that weaken this deterrence will be much less effective in fighting crime. This suggests that prevention is more powerful than redemption since anticipated redemption allows criminals to look forward to negating the consequences of their crimes.

Psychopathological Symptoms and Predictors among Inmates

“…Further to, the non-conducive prison environment, poor rules and regimes governing daily life inside the prison, and very deprived health care [8]. According to Immerwahr and Johnson [36] prisoners have tremendous opportunities to acquire and reinforce negative behaviors since the presence of wide availability of drugs even supplied by the guards themselves, and hence prison can be a "school for crime." These scholars further speculated a step ahead, and that prisoners' face daunting obstacles returning to the community and establishing a noncriminal lifestyle [36].…”

“…According to Immerwahr and Johnson [36] prisoners have tremendous opportunities to acquire and reinforce negative behaviors since the presence of wide availability of drugs even supplied by the guards themselves, and hence prison can be a "school for crime." These scholars further speculated a step ahead, and that prisoners' face daunting obstacles returning to the community and establishing a noncriminal lifestyle [36]. They likely face -no job, minimal education, few marketable skills, no particular place to go, and very little support/ monitoring, very little chance to learn useful skills.…”

Dynamic Perspectives on Crime

“…The article makes no effort at either estimation or calibration. Imai and Krishna (2004) emphasize the idea that engaging in crime today may have negative consequences for completion of education and for employment and wages in the future. The approach is a partial equilibrium dynamic structural model, along the lines of that discussed in Lee and McCrary (2009), but with a much richer specification of potentially heterogeneous preferences, both between persons and across time.…”

“…However, this substantive conclusion is intrinsically linked with the substantive conclusion of long time horizons: Imai and Krishna (2004) estimate an annual discount 6 These data are not often used within economics, but are available from ICPSR.…”

“…In a departure from the analysis of Imai and Krishna (2004) and Huang, Laing, and Wang (2004), Imrohoroglu, Merlo, and Rupert (2004) allow punishment to be of varying durations. Perhaps importantly, the calibration exercise assumes an annual discount factor of 0.989.…”