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Skill-Biased Technological Change, Earnings of Unskilled Workers, and Crime

  • Naci Mocan EMAIL logo and Bulent Unel
From the journal Review of Law & Economics

Abstract

This paper investigates the impact of unskilled workers’ earnings on crime. We create indexes of skill-biased technological change which vary by state and year, or by state, year, and industry. These indexes are used as instruments for earnings in crime regressions. We analyze US state panels, and also run structural crime equations using micro panel data from NLSY97. Estimated elasticities are markedly larger than those obtained by previous studies. Considering technology being adopted at the regional level does not alter the results appreciably. We also find evidence for asymmetric impact of unskilled workers’ earnings on crime.


Supplemental Material

The online version of this article offers supplementary material (https://doi.org/10.1515/rle-2016-0017).


Acknowledgements

We thank Deokrye Baek, Elif Filiz and especially Duha Altindag and Christian Raschke for outstanding research assistance. Steve Machin, Steve Raphael, João Manoel Pinho de Mello, Rodrigo Soares and seminar participants at the 2012 SOLE Meetings, ALCAPONE Meetings at UC-Berkeley, the Fourth Workshop on the Economics of Crime at Erasmus School of Economics in Rotterdam, PUC-Rio, Concordia University provided valuable comments. We thank Kaj Gittings for helpful suggestions and for providing us with the minimum wage data. Finally, we thank the Editor Christoph Engel and two anonymous referees for constructive comments that improved the paper.

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Published Online: 2017-5-31

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