Title

Formal Employment and Organized Crime: Regression Discontinuity Evidence from Colombia

Author(s)

Gaurav Khanna Gaurav Khanna (University of California San Diego)

Carlos Medina Carlos Medina (Banco de la Republica de Colombia)

Anant Nyshadham, Anant Nyshadham, (Boston College & NBER)

Jorge Tamayo Jorge Tamayo (Harvard University. Harvard Business School,)

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.

Creation Date

2019-08

Section URL ID

Paper Number

14

URL

https://esoc.princeton.edu/publications/esoc-working-paper-14-formal-employment-and-organized-crime-regression-discontinuity

File Function

Jel

K42, J46, J24

Keyword(s)

Colombia; organized crime, informality, occupational choice, gangs, Medellίn

Suppress

false

Series

12