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. 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.” 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.” 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,” 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.”
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.
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.
Unexpectedly though, by incorporating “unobserved familial risk factors” 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.” 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.”
The Economist “suggests two, not mutually exclusive, possibilities” 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.”
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.”
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. 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.
 “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.
 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.
 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.
 The study used data collected by the Swedish government on Swedish citizens above the age of 15.
 Ibid 6.
 “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.
 “Remarks by the President in Conversation on Poverty at Georgetown University.” The White House. May 12, 2015. Accessed August 10, 2015. https://www.whitehouse.gov/the-press-office/2015/05/12/remarks-president-conversation-poverty-georgetown-university.
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