1. Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia
- Author:
- Gaurav Khana, Carlos Medina, Anant Nyshadham, and Jorge Tamayo
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- Canonical models of crime emphasize economic incentive. 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.
- Topic:
- Employment, Illegal Trade, Organized Crime, and Socioeconomics
- Political Geography:
- Colombia and South America