Working Paper: NBER ID: w26203
Authors: Gaurav Khanna; Carlos Medina; Anant Nyshadham; Jorge A. Tamayo
Abstract: Canonical models of crime emphasize economic incentives. Yet, causal evidence of sorting into criminal occupations in response to individual-level variation in incentives is limited. We link administrative socioeconomic microdata with the universe of arrests in Medellín over a decade. We exploit exogenous variation in formal-sector employment around a socioeconomic-score cutoff, below which individuals receive benefits if not formally employed, to test whether a higher cost to formal-sector employment induces crime. Regression discontinuity estimates show this policy generated reductions in formal-sector employment and a corresponding spike in organized crime, but no effects on crimes of impulse or opportunity.
Keywords: formal employment; organized crime; Colombia; regression discontinuity; socioeconomic incentives
JEL Codes: J24; J46; K42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| SISBEN score cutoff (I32) | formal employment (J46) |
| formal employment (J46) | gang-related violent crimes (K42) |
| formal employment (J46) | gang-related property crimes (K42) |
| formal employment (J46) | gang-related drug crimes (K42) |
| SISBEN score cutoff (I32) | gang-related violent crimes (K42) |
| SISBEN score cutoff (I32) | gang-related property crimes (K42) |
| SISBEN score cutoff (I32) | gang-related drug crimes (K42) |