Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol, Emmanuelle / Brunner, Johann / Fleck, Robert / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

4 Issues per year


IMPACT FACTOR 2017: 0.306
5-year IMPACT FACTOR: 0.492

CiteScore 2017: 0.50

SCImago Journal Rank (SJR) 2017: 0.414
Source Normalized Impact per Paper (SNIP) 2017: 0.531

Online
ISSN
1935-1682
See all formats and pricing
More options …
Volume 14, Issue 3

Issues

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

The Minimum Wage and Crime

Andrew Beauchamp / Stacey Chan
Published Online: 2014-02-04 | DOI: https://doi.org/10.1515/bejeap-2013-0130

Abstract

Does crime respond to changes in the minimum wage? A growing body of empirical evidence indicates that increases in the minimum wage have a displacement effect on low-skilled workers. Economic reasoning provides the possibility that disemployment may cause youth to substitute from legal work to crime. However, there is also the countervailing effect of a higher wage raising the opportunity cost of crime for those who remain employed. We use the National Longitudinal Survey of Youth 1997 cohort to measure the effect of increases in the minimum wage on self-reported criminal activity and examine employment–crime substitution. Exploiting changes in state and federal minimum wage laws from 1997 to 2010, we find that workers who are affected by a change in the minimum wage are more likely to commit crime, become idle, and lose employment. Individuals experiencing a binding minimum wage change were more likely to commit crime and work only part time. Analyzing heterogeneity shows those with past criminal connections are especially likely to see decreased employment and increased crime following a policy change, suggesting that reduced employment effects dominate any wage effects. The findings have implications for policy regarding both the low-wage labor market and efforts to deter criminal activity.

Keywords: minimum wage; crime; unemployment

References

  • Ahn, T., P. Arcidiacono, and W. Wessels. 2011. “The Distributional Impacts of Minimum Wage Increases When Both Labor Supply and Labor Demand Are Endogenous.” Journal of Business & Economic Statistics29(1):12–23.CrossrefWeb of ScienceGoogle Scholar

  • Bureau of Labor Statistics. 2011. “Characteristics of Minimum Wage Workers.” Technical Report.PubMedGoogle Scholar

  • Burkhauser, R. V., K. A. Couch, and D. C. Wittenburg. 2000. “Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and the CPS.” Southern Economic Journal67(1):16–40.CrossrefGoogle Scholar

  • Chaplin, D. D., M. D. Turner, and A. D. Pape. 2003. “Minimum Wages and School Enrollment of Teenagers: A Look at the 1990s.” Economics of Education Review22(1):11–21.CrossrefGoogle Scholar

  • Currie, J., and B. C. Fallick. 1996. “The Minimum Wage and the Employment of Youth Evidence from the NLSY.” Journal of Human Resources31(2):404–28.CrossrefGoogle Scholar

  • Gould, E. D., B. A. Weinberg, and D. B. Mustard. 2002. “Crime Rates and Local Labor Market Opportunities in the United States: 1979–1997.” The Review of Economics and Statistics84(1):45–61.CrossrefGoogle Scholar

  • Harris, J. R., and M. P. Todaro. 1970. “Migration, Unemployment and Development: A Two-Sector Analysis.” The American Economic Review60(1):126–42.Google Scholar

  • Hashimoto, M. 1987. “The Minimum Wage Law and Youth Crimes: Time-Series Evidence.” Journal of Law and Economics30(2):443–64.CrossrefGoogle Scholar

  • Hindelang, M. J. 1981. “Variations in Sex-Race-Age-Specific Incidence Rates of Offending.” American Sociological Review 46(4):461–74.CrossrefGoogle Scholar

  • Jacob, B. A., and L. Lefgren. 2003. “Are Idle Hands the Devil’s Workshop? Incapacitation, Concentration, and Juvenile Crime.” American Economic Review93(5):1560–77.CrossrefGoogle Scholar

  • Lemos, S. 2005. “Political Variables as Instruments for the Minimum Wage.” The B.E. Journal of Economic Analysis & Policy4(1):1–33.Google Scholar

  • Lochner, L. 2004. “Education, Work, and Crime: A Human Capital Approach.” International Economic Review45(3):811–43.CrossrefGoogle Scholar

  • Luallen, J. 2006. “School’s Out... Forever: A Study of Juvenile Crime, at-Risk Youths and Teacher Strikes.” Journal of Urban Economics59(1):75–103.CrossrefGoogle Scholar

  • Machin, S., and C. Meghir. 2004. “Crime and Economic Incentives.” Journal of Human Resources39(4):958–79.CrossrefWeb of ScienceGoogle Scholar

  • Neumark, D., and W. Wascher. 1995. “The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys.” NBER Working Papers 5092, National Bureau of Economic Research, Inc., April 1995.Google Scholar

  • Neumark, D., and W. Wascher. 2006. “Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research.” Working Paper 12663, National Bureau of Economic Research, November 2006.Google Scholar

  • Raphael, S., and R. Winter-Ember. 2001. “Identifying the Effect of Unemployment on Crime.” Journal of Law and Economics44(1):259–83.CrossrefGoogle Scholar

  • Sabia, J., R. V. Burkhauser, and B. Hansen. 2012. “Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State.” Industrial and Labor Relations Review65(2):350–376.Google Scholar

  • Thompson, J. P. 2009. “Using Local Labor Market Data to Re-Examine the Employment Effects of the Minimum Wage.” Industrial and Labor Relations Review62(3):343–66.Google Scholar

  • Zavodny, M. 2000. “The Effect of the Minimum Wage on Employment and Hours.” Labour Economics7(6):729–50.Web of ScienceCrossrefGoogle Scholar

About the article

Published Online: 2014-02-04

Published in Print: 2014-07-01


Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 14, Issue 3, Pages 1213–1235, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2013-0130.

Export Citation

©2014 by Walter de Gruyter Berlin / Boston.Get Permission

Comments (0)

Please log in or register to comment.
Log in