Inequality and Crime: Separating the Effects of Permanent and Transitory Income*

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for Labour Market Policy Evaluation (IFAU) is a research institute under the Swedish Ministry of Industry, Employment and Communications, situated in Uppsala. IFAU's objective is to promote, support and carry out: evaluations of the effects of labour market policies, studies of the functioning of the labour market and evaluations of the labour market effects of measures within the educational system. Besides research, IFAU also works on: spreading knowledge about the activities of the institute through publications, seminars, courses, workshops and conferences; creating a library of Swedish evaluational studies; influencing the collection of data and making data easily available to researchers all over the country. Terms of use: Documents inIFAU also provides funding for research projects within its areas of interest. There are two fixed dates for applications every year: April 1 and November 1. Since the researchers at IFAU are mainly economists, researchers from other disciplines are encouraged to apply for funding.IFAU is run by a Director-General. The authority has a traditional board, consisting of a chairman, the Director-General and eight other members. The tasks of the board are, among other things, to make decisions about external grants and give its views on the activities at IFAU. A reference group including representatives for employers and employees as well as the ministries and authorities concerned is also connected to the institute. Papers published in the Working Paper Series should, according to the IFAU policy, have been discussed at seminars held at IFAU and at least one other academic forum, and have been read by one external and one internal referee. They need not, however, have undergone the standard scrutiny for publication in a scientific journal. The purpose of the Working Paper Series is to provide a factual basis for public policy and the public policy discussion. AbstractEarlier studies on income inequality and crime have typically used total income or total earnings. However, it is quite likely that it is changes in permanent rather than in transitory income that affects crime rates. The purpose of this paper is therefore to disentangle the two effects by, first, estimating regionspecific inequality in permanent and transitory income and, second, estimating crime equations with the two separate income components as explanatory variables. The results indicate that it is important to separate the two effects; whi...

Crime, inequality and unemployment in England and Wales

“…"These results suggest that greater attention should be given to identifying the many factors affecting crime before one concludes that income inequality is the culprit". Dahlberg and Gustavsson (2008) argued that "income can be considered as consisting of two parts, one permanent and one transitory, and it is the changes in the permanent part rather than in the transitory part that affects crime rates". Their results "indicate that it is crucially important to separate the two effects".…”

The US Crime Puzzle: A Comparative Perspective on US Crime & Punishment

“…30 28 Relatedly, Kearney and Levine (2012) …nd that US teen birth rates are particularly high among minorities and in states with high income inequality. 29 The homicide rates are averaged over the three years 2004-06 to avoid small sample noise in small states. 30 See Cook and Ludwig (2011) for a discussion of the cost-e¤ectiveness of various levers.…”

“…28 At the broadest level, this connection manifests in a simple scatter plot of incarceration and homicide rates by states, shown in …gure 8. 29 It shows that homicide and incarceration rates tend to be much higher in the South than in the rest of the US. At the same time, the plot also shows that there is something special about the United States as a whole.…”

Status concerns as a motive for crime?

“…In this realm, certain theoretical contributions address the fact that law enforcement may also succeed by granting social transfers, because this influences the opportunity costs of crime (Benoit and Osborne 1995, Demougin and Schwager 2000. The empirical literature on the association between inequality and crime has in most contributions established a positive link between the two (see Dahlberg and Gustavsson 2008, Demombynes andÖzler 2005, Fajnzylber et al 2002, Whitworth 2012, although other results have also been found (see Kelly 2000 andChintrakarn andHerzer 2012).…”