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Unemployment and Gang Crime: Could Prosperity Backfire?

Panu Poutvaara () and Mikael Priks

No 2710, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Empirical evidence reveals that unemployment tends to increase property crime but that it has no effect on violent crime. To explain these facts, we examine a model of criminal gangs and suggest that there is a substitution effect between property crime and violent crime at work. In the model, non-monetary valuation of gang membership is private knowledge. Thus the leaders face a trade-off between less crime per member in large gangs and more crime per member in small gangs. Unemployment increases the relative attractiveness of large and less violent gangs engaging more in property crime.

Keywords: unemployment; gangs; crime; violence; identity (search for similar items in EconPapers)
JEL-codes: K42 D71 D74 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2007-03
New Economics Papers: this item is included in nep-law and nep-ure
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Citations: View citations in EconPapers (5) Track citations by RSS feed

Published as 'Unemployment and gang crime: can prosperity backfire?' in: Economics of Governance, 2011, 12 (3), 259 - 273

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