Crime victims forfeit income in the labour market in the long term. This is shown by an empirical analysis of data on more than 800,000 crime victims by Professor Anna Bindler, economist of the Cluster of Excellence ECONtribute: Markets & Public Policy at the universities of Cologne and Bonn, together with Nadine Ketel (Assistant Professor, Free University of Amsterdam, Netherlands). The Dutch register data on victims of crime cover a period of twelve years, from 2005 to 2016. Using anonymized numbers, the researchers link the data to labour market outcomes collected since 1999.
Across offences, both males and females earn up to 12.9 per cent less than before the crime. At the same time, they receive social benefits on up to 6 percent more days per month. Reasons for the reduction in income may be a change to lower-paid jobs, or victims losing their employment because they are no longer able to continue their work due to physical or mental health impacts of the incident.
Bindler and Ketel differentiate between violent crimes (assault, sex offences, and threat of violence) and property crimes (burglary and robbery). The income of women declines more than that of men for all examined offences. One year after a violent crime, earnings decrease by up to 7.5 per cent for males and 10.4 per cent for females. After property crimes, especially robbery, males earn up to 8.4 per cent less, while females face a decline in income of up to 12.9 per cent. The researchers investigate domestic violence separately and find a larger effect of up to 17.9 per cent lower earnings in addition to a strongly increased dependence on social benefits.
Overall, the economists calculated an aggregated loss of earnings of about 366 million euros within only the first year after an assault. ‘Our research provides an indication of the social costs of crime’, said Anna Bindler, professor at ECONtribute: Markets & Public Policy and at the University of Cologne. ‘The results could be an impetus for appropriate compensation payments or further assistance for victims of crime, such as labour market programmes.’
The study was conducted within the framework of ECONtribute. It is the only Cluster of Excellence in economics that is funded by the German Research Foundation (DFG) and a joint initiative of the universities of Bonn and Cologne. The Cluster’s research focuses on markets at the interface between business, politics, and society. The Cluster aims to advance a new paradigm for the analysis of market failure in light of fundamental societal, technological, and economic challenges, such as increasing inequality and political polarization or global financial crises.
In an episode of the podcast "Probable Causation" Anna Bindler will discuss her study with Jennifer Doleac. It will be published tomorrow (27 October): https://www.probablecausation.com/index
Professor Anna Bindler, Ph. D.
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