Estimating the Economic Model of Crime: Employment versus Punishment Effects
11 Pages Posted: 10 Dec 2013
Date Written: February 1, 1983
Ann Dryden Witte  has recently argued in this Journal that new support is found for the deterrent hypothesis (or the "economic model of crime") when individual data are employed to estimate the determinants of rearrest rates. Witte estimates a conventional economic model of crime using a rich and carefully constructed microdata set of released prisoners in North Carolina. Her principal findings are that (1) increases in the certainty and severity of punishment tend to reduce participation in crime (measured by number of arrests or convictions per month free), and (2) higher legal wages have an extremely weak deterrent effect on crime.
In this comment I describe two separate data sets within which I find just the opposite results. Using a sample of offenders released from federal prisons in 1972, I find that increases in the severity of punishment are weakly related to participation in crime, while increases in the certainty of punishment are positively related to participation in crime. In addition, using a sample of male repeat property offenders released from Maryland prisons, I find that higher wages have a strong and consistent deterrent effect on crime. The conclusion is reached, at least from these data sets, that improving legitimate employment opportunities may be as effective, if not more effective, in reducing crime as is an increase in punishment.
Keywords: model of crime, punishments effects, employment
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