Crime and poverty: A search-theoretic approach

Chien Chieh Huang, Derek Laing, Ping Wang

Research output: Contribution to journalReview article

43 Scopus citations

Abstract

Numerous studies document that criminal activity is positively related to unemployment and negatively related to educational attainment levels within given communities. We study this phenomenon in the context of a search-equilibrium model, in which agents choose between formal employment and pursuing crime-related activities (theft). Prior to their "occupational choices," agents undertake costly schooling, raising their productivity. Crime acts, in essence, as a tax on human capital by affecting the probability that a worker's earnings (possessions) are subsequently appropriated. There are multiple equilibria. High crime, low levels of educational attainment, long spells of unemployment, and poverty are correlated across them.

Original languageEnglish (US)
Pages (from-to)909-938
Number of pages30
JournalInternational Economic Review
Volume45
Issue number3
DOIs
StatePublished - Aug 1 2004
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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