21. Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia
- Author:
- Jorge Tamayo, Anant Nyshadham, Carlos Medina, and Gaurav Khanna
- Publication Date:
- 08-2019
- Content Type:
- Working Paper
- Institution:
- Empirical Studies of Conflict Project (ESOC)
- 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 Medellίn 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:
- Crime, Economics, Political Economy, and Labor Issues
- Political Geography:
- Colombia and Latin America