Crime Causation: Economic Theories

Recently some researchers have focused their attention on juvenile crime and education. Levitt (1998) and Mocan and Rees provide evidence to show that the economic model of crime applies to juveniles as well as adults. Levitt uses state-level data over the period 1978–1993 for making comparisons between the adult criminal justice system and delinquents. The dependent variable is juvenile crime (either violent or property crime) per number of juveniles. The explanatory variables include the number of juveniles or adults in custody per crime; the number of juveniles or adults in custody per juvenile or adult; economic variables, including the state unemployment rate; and demographic variables, including race and legal drinking age, and dummy variables for year and state. Levitt finds that juvenile crime is negatively related to the severity of penalties, and that juvenile offenders are at least as responsive to sanctions as adults. Interestingly, he finds that the difference between the punishments given to youths and adults helps explain sharp changes in crimes committed by youths as they reach the age of majority.

Mocan and Rees estimate the economic model of crime for juveniles using individual-level data from a nationally representative sample of 16,478 students in grades 7 through 12. The data set contains rich information on offenses and deterrence measures, as well as on personal, family, and neighborhood characteristics. They find that probit estimates for young males selling drugs and assault are strongly affected by violent crime arrests (i.e., increases in arrests per violent crime reduce the probability of selling drugs and committing an assault). Violent crime arrests for females reduces the probability of selling drugs and stealing. Mocan and Rees also find higher levels of local unemployment and higher levels of local poverty associated with higher levels of crime. Family welfare status, a proxy for family poverty, has a positive impact on juvenile offending. Finally, family structure and the education of the juveniles' parents also have an impact on delinquent behavior.

Up to now, we have primarily concerned ourselves with research on crime reduction that focuses on labor market experiences and deterrent effects. The issue of education and training has generally been neglected. It is only recently that economists have begun to explicitly model work, education, and crime. Witte (1997) reviews the literature on education and crime and discusses models that suggest possible crime-reducing effects of education. She carefully traces the various attempts made over the past two decades at a full integration of education and crime but finds that the empirical evidence regarding the effects of education on crime is limited. In recent work, using data from the National Longitudinal Survey of Youth and Uniform Crime Reports, Lochner (1999) developed and estimated a dynamic model in which all three activities—work, investment in human capital, and crime—are endogenized. He finds that education, training, and work subsidies can reduce criminal activity.