Breaking Bad: How Health Shocks Prompt Crime

Steffen Andersen, Gianpaolo Parise and Kim Peijnenburg

No 15899, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We explore the impact of health shocks on criminal behavior. Exploiting variations in the timing of cancer diagnoses, we find that health shocks elicit an increase in the probability of committing crime by 13%. This response is economically significant at both the extensive (first-time criminals) and intensive margin (reoffenders). We uncover evidence for two channels explaining our findings. First, diagnosed individuals seek illegal revenues to compensate for the loss of earnings on the legal labor market. Second, cancer patients face lower expected cost of punishment through a lower survival probability. We do not find evidence that changes in preferences explain our findings. The documented pattern is stronger for individuals who lack insurance through preexisting wealth, home equity, or marriage. Welfare programs that alleviate the economic repercussions of health shocks are effective at mitigating the ensuing negative externality on society.

Keywords: Economics of crime; Health shocks; Human capital; Event study (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-hea and nep-law
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP15899 (application/pdf)

Related works:
Journal Article: Breaking Bad: How Health Shocks Prompt Crime (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:15899

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP15899

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().