Abstract
AbstractThis paper investigates the impact of unskilled workers’ earnings on crime. We create indexes of skill-biased technological change which vary by state and year, or by state, year, and industry. These indexes are used as instruments for earnings in crime regressions. We analyze US state panels, and also run structural crime equations using micro panel data from NLSY97. Estimated elasticities are markedly larger than those obtained by previous studies. Considering technology being adopted at the regional level does not alter the results appreciably. We also find evidence for asymmetric impact of unskilled workers’ earnings on crime.
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