Journal of Human Behavior in the Social Environment, 21:270–283, 2011
Copyright © Taylor & Francis Group, LLC
ISSN: 1091-1359 print/1540-3556 online
DOI: 10.1080/10911359.2011.564951
Economic Theories of Crime and Delinquency
ANUPAMA JACOB
School of Social Welfare, University of California at Berkeley, Berkeley, California, USA
This brief literature review highlights three key economic frameworks
that can be used to explain a persistent social problem
in modern society, crime and delinquency: the rational model,
the present-oriented or myopic model, and the radical political
economic model. Based on a cost-benefit analysis, an individuals
decision to engage in crime in the rational model is consistent
in the short-and long-term. Present-oriented individuals,
however, focus on the short-term benefits without particular concern
for the long-term consequences of their actions. The radical
political economic model focuses on the following key political
and socio-economic factors that sustain crime: relative deprivation,
poverty and inequality, unemployment, and class conflict.
The conclusion includes a conceptual map integrating the three
frameworks.
KEYWORDS Crime and delinquency, economic theory, rational
model, present-oriented model, radical political economic model
INTRODUCTION
According to the Uniform Crime Report of 2007 published by the Federal
Bureau of Investigation, the violent crime rate per 100,000 inhabitants in
the United States fell by 11% in the period of 1988–1998 and 17.7% in the
period of 1998–2007. The percent change in the last 5 years (2003–2007) was
1.9% (Federal Bureau of Investigation, n.d.). Though crime rates fluctuate
over different periods of time, the persistent nature of crime and delinquency
Address correspondence to Anupama Jacob, School of Social Welfare, University of
California at Berkeley, 120 Haviland Hall, Berkeley, CA 94720-7400, USA. E-mail: anujacob@
berkeley.edu
270
Economic Theories of Crime and Delinquency 271
exposes the challenges in understanding and addressing this important social
problem.
Crime is not limited to certain areas or to certain socioeconomic classes
of society. Criminal activities take many forms, including theft, homicide,
assault, fraud, embezzlement, and blackmail. So why does crime persist? Are
there underlying factors that can explain criminal behavior? Can we lower
the incentives for criminal behavior? Do criminals take opportunity costs of
committing a crime into account? The social science field has long been
interested in these questions.
This literature review focuses on the discipline of economics and its
assumptions about individual decisions to commit crime. The standard assumption
is that individuals who commit crimes are rational decision makers
who expect to gain something from criminal activity, and this gain is greater
than the expected costs associated with being caught. Most of the research
in this area focuses on the effects of incentives to engage in criminal behavior
and on the use of cost-benefit analysis to assess alternative policies
to reduce crime (Witte & Witt, 2000). Not all crime can be categorized as
rational behavior. Socioeconomic factors are also assumed to affect crime,
and alternative theories to explain criminal activities are used to challenge
the standard assumption of rational behavior.
The main objective of this review is to identify the key economic frameworks
that are used to explain crime and delinquency. The three key frameworks
include the rational model of crime, the present-oriented or myopic
model of crime, and the radical political economic model of crime. The
review concludes with a conceptual map that seeks to integrate the three
frameworks (Figure 1).
METHODOLOGY
The literature for this review was identified through a number of different
ways. Books and journal articles on economic theories of crime and
delinquency were first identified through a search using the University of
California, Berkeley (UCB) library systems. Keywords used in the searches
included theor* and crim*, theor* and delin*, econ* and theor* and crim*,
economic theories of crime, theories of crime and delinquency, and economic
theories of crime and delinquency. The results were sorted by subject,
further refining the search. These keywords were also used to locate
relevant literature from the EconLit database. Other search engines
such as Google, Google scholar, and amazon were used to identify literature.
A number of working papers were also retrieved from the Economics
of Crime working group at the National Bureau of Economic Research.
The references cited in all these sources provided additional information
(snowball technique).
272 A. Jacob
FIGURE 1 Economic models of crime.
In addition, scholars in the field were identified through a search of university
department Web sites. The scholars at the department of economics at
UCB were contacted and asked to recommend classic and current literature
in the field. These scholars provided additional assistance with the search
process.
Despite an extensive search of literature, this review cannot claim to be
all-inclusive. It focuses only on research on crime in the United States, and
this research concentrates primarily on optimal incentives and punishment
strategies to reduce crime. The main economic theories or models are based
on this research.
Economists have begun to question whether the standard assumption of
rational behavior holds when considering why individuals engage in criminal
activity. Can we really assume that all criminals make rational decisions to
commit a crime? Individual preferences, psychic factors, and other motivations
for crime may play an equally large role in explaining crime. However
these factors are much harder to incorporate into economic models of crime.
Hence, there is limited empirical research in this area. It will be interesting
to see how the growing field of behavioral economics can help to explain
crime and delinquency.
Economic Theories of Crime and Delinquency 273
MODELS OF CRIME
The three main economic models of crime are the rational model, the presentoriented
or myopic model, and the radical political economic model. Each
model emphasizes different factors that influence individual decisions to
commit crime and different ways of combating crime.
The Rational Model of Crime
Economics can be defined as a discipline that studies how scarce resources
are allocated by the forces of supply and demand to meet different needs
in society. In the same way, economists argue that crime is a result of
individuals’ making choices between using their scarce resources of time
and effort in legitimate or in illegitimate activities. A key assumption is that
when making these choices, individuals are rational and choose the best
option based on the available information and resources. Individuals are
perceived to be promoting their self-interest by rationally selecting options
that provide them with the greatest benefits that are expected to exceed the
costs associated with these options.
Theories of crime based on the rational model were proposed as early
as the eighteenth century by enlightenment philosophers such as Bentham
and Beccaria. Bentham made the following argument:
The profit of the crime is the force which urges man to delinquency: the
pain of the punishment is the force employed to restrain him from it. If
the first of these forces be the greater, the crime will be committed; if the
second, the crime will not be committed. (Eide, 2000, p. 346)
The profit from crime is traditionally measured in terms of monetary
benefits but can also include physical, psychic, and other benefits. The
‘‘punishment’’ or costs of crime include the risk of detection, apprehension,
and conviction and the severity of punishment. Economists do not refute
that environmental, psychological, and biological factors may affect criminal
activity. Nevertheless, they argue that individuals are free to choose between
different courses of options available to them. Therefore, as long as there
is a rational element of choice available, individuals who decide to commit
a crime will react to changes in the probability of apprehension and the
severity of punishment (Dollery & Wallis, 1996).
This framework leads to a key concept, namely, the ‘‘opportunity cost’’
of crime. Any decision that involves a choice between two or more options
has an opportunity cost. An opportunity cost can be defined as the value
of the next best alternative within the context of making a decision. Put
differently, an opportunity cost can be viewed as the benefits an individual
could have received by taking an alternative decision or action. In essence,
274 A. Jacob
the true cost of crime for a potential criminal is the opportunity cost of
spending time in prison. The opportunity cost varies among individuals
irrespective of the length of incarceration.
The rational framework distinguishes between static and dynamic models
of crime. In a static model, individuals compare the costs and benefits of
engaging in crime in a single time period. In a dynamic model, the individual
considers multiple time periods. Decisions made in the past, for example,
impact the decision-making process in the present. Dynamic models thus
account for the element of time unlike static models.
THE STATIC MODEL OF CRIME
Becker (1968) was the first to translate the argument of Bentham into an
economic theory of crime in his seminal article on crime and punishment.
Becker argues that ‘‘a useful theory of criminal behavior can dispense with
special theories of anomie, psychological inadequacies, or inheritance of
special traits and simply extend the economist’s usual analysis of choice’’
(p. 170). Becker developed a static model in which the individual considers
a single time period when making a decision on whether or not to commit
a crime. He contends that a cost/benefit analysis can be used to inform an
individual’s decision to commit a crime.
As individuals do not have perfect information, Becker assumes that rational
individuals will seek to maximize the expected benefits. Individuals do
so by comparing the benefit they would derive from a criminal activity with
the benefit derived from engaging in legal activities. An implicit assumption
is that there are no risks in terms of the returns from legitimate work. In
Becker’s model, benefit is defined as a positive function of income. Thus, an
individual will commit a crime only if his or her expected benefit from the
offense is positive. The primary focus of the model is the deterrent effect of
the criminal justice system in this decision process.
Another assumption in Becker’s model is that of stable preferences.
This assumption allows one to predict how individuals respond to changes
in parameters of being caught and punished; for example, whether the act of
crime or deviance can be made less attractive to an individual and whether
crime or deviant behavior can be averted. Becker addresses this issue by
focusing on the probability and severity of punishment and its impact on
the total amount of crime. Becker argues that the probability and severity of
punishment can reduce the number of crimes by acting as deterrentsto crime.
The individual’s attitude toward risk determines which of the two deterrents
would be more effective in reducing crime. For example, an individual
who is risk-averse may react more strongly to changes in the probability of
apprehension than to changes in the magnitude of the punishment, all other
things being equal. An increase in the costs of crime reduces the expected
gain from committing an offense and thus lowers the incentive to offend.
Economic Theories of Crime and Delinquency 275
EXTENSIONS TO THE STATIC MODEL
Later economic models of crime employ the theory of supply and theory of
behavior toward risk. These models are similar to portfolio models, wherein
an individual allocates assets or resources among different risky and nonrisky
options. Ehrlich (1973) expands Becker’s basic model by ascribing
monetary equivalents to different psychic costs and benefits of legitimate and
illegitimate activities. He also assumes that, in a given time period, a criminal
faces only one of two possibilities: The individual is caught and punished,
or the individual is not caught and, therefore, not punished (Pyle, 1983).
Ehrlich assumes a one-period time frame in which the individual chooses
how to allocate his time for each sequential period. The uncertainty in the
model concerns only which of the two possibilities mentioned previously will
transpire. An additional limitation is that individuals allocate a fixed amount
of time to leisure. The remaining time is allocated to either legitimate or
illegitimate activities. Ehrlich assumes that the benefits from illegal activities
thus depend only on the time allocated to that activity. The amount of time
a rational individual decides to spend in an illegal activity will again depend
on the relative rewards from the activity and the costs involved in terms of
the probability of apprehension and severity of punishment.
The introduction of fixed leisure time in this model implies that the
time allotted to legitimate and illegitimate activities changes in equal and
opposite directions. An increase in the probability of apprehension reduces
the amount of time an individual spends on illegal activities except in cases
wherein the individual already specializes in legal or illegal activities (Pyle,
1983). A considerable increase in the probability of apprehension is needed
to reduce the time allocated to illegal activities in the case wherein the
individual specializes in crime. The effect of changes in the severity of
punishment again depends on the individual’s attitude toward risk. A riskaverse
individual will obviously spend less time on illegal activities if there
is an increase in the severity of punishment. However, a definite conclusion
cannot be reached in the cases where an individual prefers risk (risk lover).
Block and Heineke (1975) argue that the decision to commit an offense
cannot be studied only with regard to how it affects an individual’s level of
monetary wealth. They argue that the psychic costs of crime and employment
must be specified explicitly. Their model focuses on property crimes, so an
individual has to choose between employment (legal) and theft (illegal).
Such a specification has vital behavioral implications. They note that an
individual’s allocation of effort between labor and theft is dependent not
only on their attitude towards risk but on his or her preference for honesty
or crime. Block and Heineke show that individuals who are risk-averse and
have a preference for honesty reduce their offending if the probability of
apprehension or severity of punishment is increased. However if individuals
have a preference for crime even though they are risk averse, changes in
deterrents may have little impact on their behavior (Pyle, 1983).
276 A. Jacob
DYNAMIC MODELS OF CRIME
Though the rational models presented earlier are set in a static framework,
an individual’s decision to commit a crime also has an impact on the future
payoffs from choices made in the past or present. Dynamic models integrate
past experience with forward-looking behavior. The former deals with
how past arrests impact decisions made in the present. The latter examines
how decisions made in the present affect future consequences related to
employment and expected benefits.
Using the dynamic model, there is evidence that important factors can be
used to predict criminal behavior. For example, juvenile records are sealed
at the age of 18 years, and sanctions by juvenile courts tend to be milder
than those in the adult courts. As such, one would expect higher crime
rates among youth younger than age 18 (Imai & Krishna, 2004). Indeed,
Levitt (1997) finds that there is a clear drop-off in the age of arrest after 18
in states wherein juvenile courts issue milder sanctions compared to adult
courts than in states wherein juvenile sanctions are more severe. Individuals
thus seem to change their behavior when they anticipate the possible future
consequences of their actions.
Flinn (1986) includes the formation of human capital in a time-allocation
model. Flinn argues that human capital is accumulated at work. As a result,
if time spent on crime lowers time spent at work, the amount of human
capital accumulated by an individual is reduced. This diminishment leads to
lower future earnings and consequently less time in legal work. Crime and
work are assumed to be substitutes in this model. Therefore, reduced time
at work leads to an increased involvement in criminal activities.
Williams and Sickles (2000) extend Ehrlich’s (1973) model by including
social capital to measure the effect of social norms on an individual’s decision
to engage in crime. The authors assume that participation in crime decreases
the value of an individual’s stock of social capital, namely, marriage and
employability. In other words, individuals with families or good jobs have
more to lose if they are caught in a criminal act than individuals without
these resources. The main conclusion is that criminals behave rationally
when they take into consideration the consequences of current actions on
future outcomes. Similarly Imai and Krishna (2004) find that the incentives
to commit crime are reduced when the risks of apprehension can jeopardize
future employment.
The Present-oriented or Myopic Model of Crime
Human beings are generally impatient. Most people would prefer to experience
immediate rewards and postpone the associated costs. Relaxing the
assumption of rational behavior allows economists to study cases wherein
criminals appear to behave in a non-rational, impulsive, or myopic manner.
When deliberating about the trade-offs between the present and the future,
Economic Theories of Crime and Delinquency 277
individuals who attach greater weight to the present are said to have more
‘‘present-oriented’’ preferences (O’Donoghue & Rabin, 1999).
Economists use hyperbolic discounting to formally examine presentoriented
behavior. Hyperbolic discounting is assumed to reveal irrational
behavior because decisions made in this setting are not time-consistent.
Time inconsistency refers to a situation whereby an individual’s preferences
change over time, such that what is preferred at one point in time is inconsistent
with what is preferred at another point in time. One common
way this is revealed is when an individual displays undue concern with
the immediate rather than distant future. A rational individual, conversely,
compares present and future gains and shortfalls by seeking to match shortterm
and long-term preferences. A rational individual who does not give
added weight to short-term benefits from a criminal activity will most likely
be someone who displays patience.
The desire for immediate gratification may, however, lead an individual
to commit a crime that has negative expected returns in the long-term
(Kleiman, 2005). When the costs of crime are delayed, the immediate benefits
support the offender’s impulsiveness, resulting in more crime (McAdams
& Ulen, 2008). The threat of punishment does not deter present-oriented
individuals because the gains from the illegal activity are closer to the present
whereas the related punishment that he or she might suffer lie in the more
distant future (Banfield, 1977).
Lee and McCrary (2005) use a large, individual-level, longitudinal data
set of felony arrests maintained by the Florida Department of Law Enforcement
to measure the deterrence effects of criminal sanctions in the period
1989 to 2002. In particular, they examine whether there is any significant
drop in offense rates among juveniles once they turn 18 years, as they are
treated as adult offenders and face longer sentences. Their assumption is
that sufficiently patient individuals will lower their offending rates as soon
as they turn 18. However, they find that criminals do not make behavioral
adjustments in anticipation of this change in the severity of punishment. This
finding suggests that potential offenders are very impatient, myopic, or both.
Nagin and Pogarsky (2003) use data on college students to examine
under what circumstances individuals would cheat. They find that less cheating
occurred when the risk of apprehension was greater but not when
there were higher penalties. Furthermore, they find that the prevalence of
cheating was higher among more present-oriented individuals. Similarly,
Nagin and Paternoster (1994) use a student questionnaire and find that
present-orientation is significantly related with the probability of committing
a number of crimes.
Urban ethnographers such as Fleisher (1995) and Anderson (1999) find
that crime-prone youths are overly present-oriented for any type of traditional
crime deterrence to be successful. The following quote from a young prisoner
in a paper by DiIulio (1996) summarizes the present-oriented concept well:
278 A. Jacob
‘‘You never think about doing thirty when you don’t expect to live to thirty’’
(p. 17). Nagin and Paternoster (1994) argue that individuals who are more
present-oriented invest less in social bonds. As such, they are less deterred
by the prospects of breaking those bonds and committing a crime. The
astonishing degree to which youths commit crimes for not only profit but
status, image, and even fun has yet to be fully considered by economists.
The rational economic models of crime described earlier suggest that
crime can be reduced by increasing the expected costs of criminal activities.
The ability to increase this cost depends largely on the extent to which
potential criminals discount their future welfare. If individuals are more
concerned with their present welfare rather than their future welfare, an
increase in the length of incarceration may have little impact on criminal
behavior (Lee & McCrary, 2005). In essence, the most effective sanctions of
the rational model will do little to dissuade the present-oriented or myopic
offender. Therefore effective enforcement policies for this type of offender
should focus on lowering the immediate benefits or increasing the immediate
costs of a criminal activity to discourage present-oriented or myopic behavior
(Kleiman, 2005).
The Radical Political Economic Model of Crime
The rational and present-oriented models of crime focus primarily on the
individual’s decision to allocate time between legal and illegal activities. The
radical political economic models, conversely, focus on key political and
socioeconomic factors that sustain crime. The key factors in this model are
relative deprivation, poverty and inequality, unemployment, and class. These
factors are all interrelated.
RELATIVE DEPRIVATION
The factor of relative deprivation focuses on the relative differences in income
among the different classes in society. According to this view, individuals
identify themselves with the group they belong to in society. The
degree of deprivation is defined as the distance between the particular
group’s experiences compared with that of the larger society, which is regarded
as a proxy for what the group is entitled to. In neoclassical economics,
individuals determine their chances of employment and income
based on their level of education and a relatively open labor market. In
the relative deprivation model, individuals perceive their fate to be similar to
that of their peers (Nickerson, 1983). When Danziger (1976) and Danziger
and Wheeler (1975) studied the relationship between the relative deprivation
approach and criminal activities (burglary and robbery), they found
that there is a positive relationship between income inequality and criminal
activities.
Economic Theories of Crime and Delinquency 279
Poverty and inequality. Differences in poverty rates and wealth are
commonly viewed as factors influencing variations in crime rates. Proponents
of the federal Great Society programs in the 1960s believed that poverty
amelioration would eventually lower crime by enhancing the living conditions
of the poor and thereby reduce their involvement in criminal activities
(Nickerson, 1983).
To examine the link between inequality and crime, the income differences
between the rich and the poor can be used when measuring crime
rates in different cities (Ehrlich, 1973; Fleisher, 1976). However Nickerson
(1983) questions this approach based on evidence that most crimes occur
within poor communities and that the poor are often the victims themselves
rather than the well-off. These crimes of opportunity may be explained by
the lower costs associated with committing a crime in familiar territory.
Gordon (1973) argues that capitalism and its associated inequalities
generate crime. Gordon views criminal behavior as part of the structure
of capitalist societies and in the socioeconomic conflicts resulting from that
structure. As a result, crime is an outcome of the poor’s trying to create a
better existence for themselves. The challenge here lies in clearly differentiating
between Ehrlich’s relative poverty formulation and Danziger’s relative
deprivation approach.
Unemployment. Different models examine the different relationships
between unemployment and crime. Some economic models assume that unemployment
either lowers the opportunity costs of crime or that it increases
the need to supplement income from sources other than legal employment.
Radical theories suggest that unemployment increases poverty. The resulting
deprivation then lowers the costs of criminal activities and punishment. The
indirect result is that conflict increases (Nickerson, 1983).
However, how do individuals form expectations about their earnings
potential in the labor market? If there is a considerable gap between what
the individual believes is attainable (group experience) and what is unattainable
(larger society experience), an individual perceives this gap as relative
deprivation. Hence the opportunity costs of crime may be reduced because
the returns from regular employment are seen as minimal. In contrast, if the
larger society also suffers from unemployment, the shortage of employment
opportunities may still be considered equitable. Nickerson (1983), in support
of this argument, notes that crime rates during the Great Depression were
stable or falling.
Thornberry and Christenson (1984) use data from a longitudinal cohort
study of delinquency in Philadelphia and find that unemployment significantly
impacts criminal involvement. They find that crime rates, especially
property crime, are higher during periods of high unemployment. Other studies
(Witte & Tauchen, 1994; Levitt, 1996; Witt, Clark, & Fielding, 1999) also
find a positive relationship between unemployment and crime. Interestingly,
Cantor and Land (1985) find a negative relationship between unemployment
280 A. Jacob
and property crime in the United States because a general slowdown in the
economy increases time spent at home and, therefore, the ability to guard
one’s property.
One weakness in connecting employment with crime is that the two
activities are assumed to be independent of each other. Some criminals (e.g.,
drug dealers) switch between legal and illegal work depending on available
opportunities. This weakness becomes particularly challenging when disadvantaged
youths are considered. Freeman (1999) finds that among youths
who report committing crimes, only those close to being arrested reduce
legal work. This finding is supported by evidence from ethnographic work
such as Anderson’s (1999), which explains how youth in inner-city Philadelphia
regard the drug economy as their main source of employment.
Participants in the illegal economies engage in a number of different
income-producing crimes in addition to legal work. Freeman (1995) applies
an ecological model of foraging animals to crime-prone youths. Such youths
are assumed to have a reservation wage for crime and a reservation wage
for legal work. A reservation wage is the lowest wage rate at which an
individual would be willing to accept a particular type of job. The youths
choose between the two when the potential benefit from one activity exceeds
the reservation wage of the other. The fact that youths can shift between
crime and an unskilled job reveals that the relationship of youths to crime
can expand or contract dependent upon the rewards from legal work or
criminal activities (Witte & Witt, 2000). One way to understand the permeable
boundary between crime and legal work is to view young criminals as
actively seeking to optimize their income and take advantage of all available
economic opportunities.
Class. The attempt to relate criminal activities to specific ideas of class
conflict is often based on a Marxian analysis. The use of laws is assumed
to systematically discriminate against the poorer classes. Taylor, Walton,
and Young (1975) suggest that deviant behavior may be a reaction to the
challenges of living in a conflicted society. Class bias is revealed in the
attention that crimes, such as burglary or theft, receive in comparison with
white collar crime, although the latter type of crimes represent a larger
proportion of monetary losses than the former type (Simon & Witte, 1982).
This finding supports the liberal perspective that crime is really a response
to societal prejudice against the poor.
Gordon (1973) contrasts white-collar crimes typically committed by the
richer classes of society with those committed by the poor. The former type
of crimes tends to be more nonviolent in nature because they are crimes
that must be committed in secret. The latter crimes often require direct
confrontation or intimidation and sometimes the silencing of the victims to
escape apprehension. Gordon quotes Robert Morgenthau (1969), who writes:
Those growing up in the ghetto ‘‘will probably never have the opportunity to
embezzle funds from a bank or to promote a multimillion dollar stock fraud
Economic Theories of Crime and Delinquency 281
scheme. The criminal ways which we encourage (them) to choose will be
those closest at hand—from vandalism to mugging to armed robbery’’ (p. 20).
Nickerson (1983), however, argues that Gordon’s explanation oversimplifies
criminal activities and requires a closer examination of the link between
social conditions and criminal behavior.
DISCUSSION AND CONCLUSION
From a rational perspective, individuals make a choice about how best to
spend their time. In making the choice, they assess the costs and benefits
of spending their time in legal or illegal work. Individuals thus choose to
commit a crime only if the expected benefits from that choice exceed the
expected costs associated with it. The rational model thus focuses on an
individual’s incentives to commit crime. This focus reflects a faith in the
ability to shape individual behavior through the use of negative incentives
or deterrents. An individual-oriented approach relies on the probability of
apprehension and the severity of punishment as tools to keep individuals
from participating in criminal activities.
One key criticism of the rational model is that the planful and thoughtful
decision-making process does not fit the opportunistic, impulsive, and even
rash nature of criminal activity. Present-oriented individuals generally do
not make rational decisions when they focus on short-term benefits and
ignore the long-term consequences of their actions. One important result is
that the deterrence tools used in the rational model will not deter presentoriented
offenders, all other things being equal. An effective deterrence
strategy should target an individual’s short-term preferences that need to
be identified across individuals with different motivations and reasons for
engaging in crime.
The radical theories focus on the link between crime and socioeconomic
factors (e.g., poverty and inequality, relative deprivation, unemployment,
and class structure) whereby an increase in these factors leads to increased
crime. However these links are quite complex, and the causal relationships
are debatable. For example, does poverty lead to more crime, or does more
crime lead to persistent poverty? More research is needed on how the social
and economic environment affects the costs and benefits of criminal activity.
A greater understanding of the role of norms and values, opportunities, and
abilities in predicting crime is also needed.
Most economic research on crime and delinquency has focused on how
lawbreakers can be deterred through the criminal justice system and on the
relationship between legal employment and illegal activities. This relationship
between work and crime may be far more intricate than many economic
models have implied thus far. Determining optimal enforcement policies
becomes even more problematic when individual choices are aggregated
282 A. Jacob
across a wide range of individuals. The increase in juvenile crime has also
revealed the inadequacies of the economic models in explaining non-rational
behavior and crime. Economists also need to consider how best to include
environmental and behavioral factors (e.g., peer group pressure, family and
community, status) in research that seeks to explain this phenomenon.
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