• <div class="header-image" style="background-image: url(/live/image/gid/4/2611_Header_V6N2_web_4.rev.1518551584.jpg);">​</div><div class="header-background-color"/>

Do Economic Policies Reduce Crime?

November 17, 2015

A November 2014 report, Household Poverty and Nonfatal Violent Victimization, 2008–2012, presented findings tracking the prevalence of victims of violence and crime within communities below and above the poverty line throughout America.[1] The study suggested a relationship between people in households at or below the Federal poverty level and an increased rate of nonfatal “violent victimization,” which includes “rape or sexual assault, robbery, aggravated assault, and simple assault.”[2] This finding was more than double than that of households above the poverty level.

Benjamin Fogel, College of Arts and Sciences Class of 2017

Many conflate this association with causation and see a simple solution to this problem: promote economic development as a means of reducing violence and crimes in poor urban communities.

The link between poverty and crime is not a new concept and is not measured by victimization alone. Twenty years ago, Ohio State University published research declaring “Poverty, not race, tied to high crime rates in urban communities.”[1] They found that the violent crime rate was similar in poor white neighborhoods to the rates in poor black neighborhoods. The BJS “victimization” study echoed these sentiments finding that poor whites had similar rates of violence to poor blacks. There seemed to be consistency and consensus after the Ohio State research was published that poor neighborhoods, regardless of color, was the best indicator for crime.

However, the “victimization” study begins to raise questions about accepting that proposition at face value. Although the study found similar rates of violent crime in poor black and white communities, they found that poor Hispanics had a significantly lower rate of violence. Further complicating the assumptions about poverty and crime, the study found that “the rate of violent victimization for Hispanics did not vary across poverty levels,”[2] bucking the trend of violence and crime being wholly consistent with poverty level, and indicating that the answer to whether economic policies reduce crime will be nuanced and uncertain. As a 2010 New Republic article notes, “One problem in resolving this question, however, is that very few economists actually study the connection between economic conditions and crime.”[3]

Just one month before the release of the “victimization” study on the correlation of violence and poverty, the British Journal of Psychiatry released a small but extraordinary finding regarding a study of the link between violence and wealth as family and individuals were lifted out of poverty.[4]

The study found, unsurprisingly, that young adults who grew up in households with bottom-fifth earnings were more likely to be charged and convicted of violent crimes, by a degree of seven, to young adults who grew up in households with top-fifth earnings. Young adults in the lowest tier were also charged and convicted with misuse of legal and illegal substances by double the rate of young adults in the highest tier.[5]

Unexpectedly though, by incorporating “unobserved familial risk factors”[6] the study found that in “families which had started poor and got richer, the younger children – those born into relative affluence – were just as likely to misbehave when they were teenagers as their elder siblings had been.”[7] In other words, crime and drug abuse rates remained constant within families as their income increased. As an Economist article would comment on this study, “Family income was not, per se, the determining factor.”[8]

The Economist “suggests two, not mutually exclusive, possibilities”[9] to make sense of

these findings. The first possibility is that a “family’s culture, once established, is “sticky”—that you can, to put it crudely, take the kid out of the neighborhood, but not the neighborhood out of the kid. Given, for example, children’s propensity to emulate elder siblings whom they admire, that sounds perfectly plausible.”[10] 

If the results of the study were replicated, it would have several interesting implications. The first “possibility” suggested by the Economist would imply that simply increasing the income and improving the financial woes of society’s poorest would not be sufficient to lower rates of crime. While there are still dozens of important and imperative reasons to help the poorest amongst us, the study hints at a necessity to promote definite and forward-looking social policies to help abate levels of crime and violence in poor communities. Alleviating the burdens of poverty, however, could begin to shift the cultural environment that leads to this documented violence and crime.

The second possibility the Economist proposes “is that genes which predispose to criminal behavior (several studies suggest such genes exist) are more common at the bottom of society than at the top, perhaps because the lack of impulse-control they engender also tends to reduce someone’s earning capacity.”[11]

While there may not be an economic policy to address that, it should be clear that economic empowerment at least gives the opportunity to end some crime by altering the environment in poor communities - but it must be done in conjunction with positive social policies aimed at solving this issue in order to be successful.

While the debate for the causes of crime continues to play out, the issue of poverty reduction is being brought to the forefront of public policy. This May, Arthur Brooks, President of the American Enterprise Institute and Robert Putnam, a public policy professor at Harvard’s Kennedy School, sat down with President Obama to discuss effective ways to fight poverty and change the conditions and culture that lead to it.[12] At the same time, the President is calling for sweeping reforms to our criminal justice and policing systems. This would seem to suggest that the administration, in its waning days, would like to make a priority of poverty, crime, policing and the relationship between the three - an issue that has been brought to the forefront by the riots and protests in Baltimore and Ferguson. 

As nationwide criminal justice reform joins the “war on poverty” and makes it a priority on the agenda of national issues, the nexus of economic empowerment and violence and crime in poor urban communities will be a most pertinent and fiercely contested topic. This debate must focus on more than just economic policies and must take a broader approach to tackle the issues of violence and crime.


[1] “Poverty, Not Race, Tied to High Crime Rates in Urban Communities.” Ohio State University. Accessed August 10, 2015. http://researchnews.osu.edu/archive/badcomm.htm.

[2] Ibid.

[3] Plumer, Bradford. “Crime Conundrum.” New Republic. December 22, 2010. Accessed August 10, 2015. http://www.newrepublic.com/article/80316/relationship-poverty-crime-rates-economic-conditions.

[4] Sariaslan, A., H. Larsson, B. D’onofrio, N. Langstrom, and P. Lichtenstein. “Childhood Family Income, Adolescent Violent Criminality and Substance Misuse: Quasi-experimental Total Population Study.” The British Journal of Psychiatry 205, no. 4 (2014): 286-90. doi:10.1192/bjp.bp.113.136200.

[5] The study used data collected by the Swedish government on Swedish citizens above the age of 15.

[6] Ibid 6.

[7] “To Have and Have Not.” The Economist. August 14, 2014. Accessed August 10, 2015. http://www.economist.com/news/science-and-technology/21613303-disturbing-study-link-between-incomes-and-criminal-behaviour-have-and.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>