Unintended Policy Effects and Youth Crime

Abstract

This dissertation examines how some policies, though not intended to, can influence youth crime. The first chapter studies the minimum dropout age (MDA), a compulsory schooling policy. This paper exploits state-level policy variation to identify the immediate and long-run effects of the MDA on crime. I find that higher compulsory schooling ages decrease male property crime while individuals are forced to be in school, but this effect dissipates in early adulthood. Male drug crime, however, experiences a decrease in both the short and long-run. These results provide further evidence for the incapacitation effect of schooling. The inconsistent long-run effect, however, calls into question the size of compulsory schooling's human capital effect on crime. The evidence indicates that, rather than a human capital effect, long-run decreases in crime may be explained by a dynamic incapacitation effect that is stronger for certain crimes, e.g., drug vs. property crimes. These findings have policy implications for crime deterrence and our understanding of criminal career development. The second chapter (co-authored with Drew Beauchamp) investigates how increases in the minimum wage impact the criminal behavior of affected workers. A growing body of empirical evidence indicates that increases in the minimum wage have a displacement effect on low-skilled workers. We use detailed panel data from the National Longitudinal Survey of Youth 1997 cohort to examine the effect of increases in the minimum wage on self-reported criminal activity and test the employment-crime substitution hypothesis. Exploiting changes in state and federal minimum wage laws from 1997 to 2010, we find that workers who are affected by a change in the minimum wage are more likely to become idle and unemployed. Further, there is an increase of property theft among both the unemployed and employed, suggesting that substitution between employment and crime is stronger than the income effect. These findings have implications for policy regarding both the low-wage labor market and criminal activity.