Portuguese Economic Journal

, Volume 5, Issue 2, pp 149–165 | Cite as

Crime and benefit sanctions

Original Paper


In this paper we look at the relationship between crime and economic incentives in a different way to other work in the economics of crime field. We look at empirical models where a toughening of the unemployment benefit regime can be used to study how people on the margins of crime may react to changes in economic incentives. We present three sets of complementary evidence, all of which show that toughening the benefit regime can have an unintended consequence, namely increases in crime. The first approach presents quasi-experimental evidence, looking at crime rates in areas of England and Wales before and after the introduction of a new, tougher unemployment benefit programme—the Jobseekers Allowance (JSA)—in October 1996. The second approach considers qualitative evidence on individuals affected by the change in the benefit regime. The third relates changes in area crime rates to post-JSA sanctions. Each of these approaches uncovers evidence of higher crime occurring as a consequence of the benefit reform.


Crime Benefit sanctions Jobseekers allowance JEL Classification H00 J65 


  1. Atkinson A, Micklewright J (1991) Unemployment compensation and labor market transitions: a critical review. J Econ Lit 29(4):1679–1727Google Scholar
  2. Becker G (1968) Crime and punishment: an economic approach. J Polit Econ 76(2):175–209CrossRefGoogle Scholar
  3. Berkowitz L (1989) The frustration–aggression hypothesis: examination and reformulation. Psychol Bull 106(1):59–73CrossRefGoogle Scholar
  4. Cantor D, Land K (1985) Unemployment and crime rates in post World War II United States: a theoretical and empirical analysis. Am Sociol Rev 50(3):317–332CrossRefGoogle Scholar
  5. Card D (1992) Using regional variation in wages to measure the effects of the Federal minimum wage. Ind Labor Relat Rev 45(1):22–37CrossRefGoogle Scholar
  6. Dollard J, Doob L, Miller N, Mowrer O, Sears R (1939) Frustration and aggression. Yale University Press, New HavenGoogle Scholar
  7. Ehrlich I (1973) Participation in illegitimate activities: a theoretical and empirical investigation. J Pol Econ 81(3):521–563CrossRefGoogle Scholar
  8. Ehrlich I (1996) Crime, punishment, and the market for offences. J Econ Perspect 10(1):43–67Google Scholar
  9. Fagan J, Freeman R (1999) Crime and work. Crime and Justice: A Review Of Research 25:113–178Google Scholar
  10. Freeman R (1999) The economics of crime. In: Ashenfelter O, Card D (eds) Handbook of labor economics 3C. Elsevier Science, Amsterdam, pp3529–3571Google Scholar
  11. Gould D, Mustard D, Weinberg B (2002) Crime rates and local labor market opportunities in the United States: 1979–1997. Rev Econ Stat 84(1):45–61CrossRefGoogle Scholar
  12. Grogger J (1998) Market wages and youth crime. J Labor Econ 16(4):756–791CrossRefGoogle Scholar
  13. Grogger J (2000) An economic model of recent trends in violent crime. In: Blumstein A, Wallman J (eds) The crime drop in America. Cambridge University Press, Cambridge, pp 266–287Google Scholar
  14. HMSO (1994) Jobseekers Allowance. Cm 2687:LondonGoogle Scholar
  15. Machin S, Manning A, Rahman L (2003) Where the minimum wage bites hard: the introduction of the UK National Minimum Wage to a low wage sector. J Euro Econ Assoc 1(1):154–180CrossRefGoogle Scholar
  16. Machin S, Manning A (1999) The causes and consequences of long term unemployment in Europe. In: Ashenfelter O, Card D (eds) Handbook of labor economics 3C, Elsevier Science, Amsterdam, pp 3086–3139Google Scholar
  17. Machin S, Meghir C (2004) Crime and economic incentives. J Human Res 39(4):958–979Google Scholar
  18. McKay S, Smith A, Young R, Walker R (1999) Unemployment and jobseeking after the introduction of Jobseeker’s Allowance.DSS research report no. 99, Corporate Document Services, LeedsGoogle Scholar
  19. Nagin D (1998) Criminal deterrence research: a review of the evidence and a research agenda for the outset of the twenty-first century. In: Michael T (ed) Crime and Justice: An Annual Review of Research 23:1–91Google Scholar
  20. Elizabeth R, Shah S, White R, Dawes L, Tinsley K (2000) Evaluating Jobseeker’s Allowance: a summary of the research findings, Department of Social Security Research Report No. 116Google Scholar
  21. Sweeney K (1998) The effect of Jobseeker’s allowance on the claimant count. Labour Mark Trends 4:195–203Google Scholar
  22. Van Reenen J (2004) Active labor market policies and the British New Deal for the young unemployed in context. In: Card D, Blundell R, Freeman R (eds) Seeking a premier economy: the economic effects of British economic reforms, 1980–2000. National Bureau of Economic Research Chicago University Press, Chicago, pp 196–461Google Scholar
  23. Vincent J (1998) Jobseeker’s Allowance evaluation: qualitative research on disallowed and sanctioned claimants. Phase two after Jobseeker’s Allowance. DfEE Research Report RR86Google Scholar

Copyright information

© Springer-Verlag 2006

Authors and Affiliations

  1. 1.Department of Economics, London School of EconomicsUniversity College London and Centre for Economic PerformanceLondonUK
  2. 2.Department of Economics, Royal Holloway University of London and Centre for Economic PerformanceLondon School of EconomicsLondonUK

Personalised recommendations