| In this paper we consider the connection between crime and the labour market by focussing specifically on cases where changes in minimum wage floors provide substantial pay increases for low wage workers, thereby altering their incentives to participate in crime or work. We formulate empirical tests, based upon area-level data, which consider the extent to which the sizable pay increasees offered by inimum wage increases are able to reduce crime. Comparing area-level crime rates before and after minimum wage changes produces evidence in line with the notion that altering economic incentives for low wage workers can reduce crime. Our results show that crime was reduced in areas which had more low wage workers before the introduction of the national minimum wage in the UK in April 1999. |
Updated 05/20/2006