Wednesday, September 12, 2007

A Utilitarian Rationale for "Social Insurance"?

My good friend Price Fishback has an interesting paper:

Striking at the Roots of Crime: The Impact of Social Welfare Spending on
Crime During the Great Depression

Ryan Johnson, Shawn Kantor & Price Fishback
NBER Working Paper, January 2007
(slightly older, free version)

The Great Depression of the 1930s led to dire circumstances for a large
share of American households. Contemporaries worried that a number of these
households would commit property crimes in their efforts to survive the hard
times. The Roosevelt administration suggested that their unprecedented and
massive relief efforts struck at the roots of crime by providing subsistence
income to needy families. After constructing a panel data set for 83 large
American cities for the years 1930 through 1940, we estimated the impact of
relief spending by all levels of government on crime rates. The analysis
suggests that relief spending during the 1930s lowered property crime in a
statistically and economically significant way. A lower bound ordinary least
squares estimate suggests that a 10 percent increase in per capita relief
spending during the Great Depression lowered property crime rates by close
to 1 percent. After controlling for potential endogeneity using an
instrumental variables approach, the estimates suggest that a 10 percent
increase in per capita relief spending lowered crime rates by roughly 5.6 to
10 percent at the margin. More generally, our results indicate that social
insurance, which tends to be understudied in economic analyses of crime,
should be more explicitly and more carefully incorporated into the analysis
of temporal and spatial variations in criminal activity.

(Nod to KL, who would still commit crimes no matter HOW much the government offered to pay him. It's the thrill, you see)


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generic cialis said...

With this second great depression whats going to happen? I'm very scare about the future seriously.

pharmacy said...

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