Working Papers

Crime and the Minimum Wage - JMP

(R&R Review of Economic Dynamics)

Abstract: How does the minimum wage affect crime rates? Empirical research suggests that increasing a worker's wage can deter him from committing crimes. On the other hand, if that worker becomes displaced as a result of the minimum wage, he may be more likely to commit a crime. In this paper, I describe a frictional world in which a worker's criminal actions are linked to his labor market outcomes. The model is calibrated to match labor market outcomes and crime decisions of workers from the National Longitudinal Survey of Youth 1997, and shows that the relationship between the aggregate crime rate and the minimum wage is U-shaped. The results from the calibrated model as well as empirical evidence from county level crime data and state level minimum wage changes from 1995 to 2014 suggest that the crime minimizing minimum to median wage ratio for 16-19 year olds is 0.91. However, the welfare maximizing minimum to median wage ratio is 0.88, not equal to the crime minimizing value.


Testing the Independence of Job Arrival Rates and Wage Offers in Models of Job Search*

with Ben Griffy, Bryan Engelhardt, and Peter Rupert
Abstract: Is the arrival rate of a job independent of the wage that it pays? We answer this question by testing how, and to what extent, unemployment insurance changes the hazard rate of leaving unemployment across the wage distribution using a Mixed Proportional Hazard Competing Risk Model and data from the 1997 National Longitudinal Survey of Youth. Controlling for worker characteristics we reject that job arrival rates are independent of the wages offered. We apply the results to several prominent job-search models and interpret how our findings are key to determining the efficacy of unemployment insurance.

*Previously distributed under the title "Do Workers Direct their Search?"


Quality Hours: Measuring Labor Input

with Finn E. Kydland and Peter Rupert
Abstract: We construct an aggregate labor input series from 1979 to adjust for changes in the experience and education levels of the workforce using the Current Population Survey's Outgoing Rotation Groups. We compare the cyclical behavior of labor input to aggregate hours - finding that labor input is about 11% less volatile over the business cycle and that the quality of the workforce is countercyclical. We show that a decrease in labor productivity beginning in 2004, the "productivity slowdown," is understated by 23 percentage points when using aggregate hours instead of labor input to calculate productivity, and that 80% of the average quarterly growth rate of labor productivity can be attributed to increases in education and experience since 2004.

Data: Final Data , Read Me



Work in Progress

Dual Search and Migration

with E. Charlie Nusbaum and Peter Rupert - email for pdf
Abstract: From 1964-1990, the aggregate intercounty migration rate remained largely unchanged, after which it began to decrease. During this same period, however, the intercounty migration rate of married couples steadily declined while the migration rate of single individuals concurrently increased. These differential trends suggest important differences in how multi-member households and individuals make decisions. This paper builds on the extensive demography and labor literature by asking how much of the decline in the mobility of married couples can be accounted for by the rapid increase in female labor force participation from 1960 to 2000?



Why do Europeans steal more than Americans?

with Marek Kapicka and Peter Rupert - email for pdf
Abstract: Property crime is today more widespread in Europe than in the United States, while the opposite was true during the 1970s and 1980s. In this paper we study the deter- minants of crime in a dynamic general equilibrium labor and crime search model. We focus on United States and United Kingdom, and compute the contribution of various factors to the total change. We find that changes in the probability of ap- prehension and prison duration increased crime rates for both countries. At the same time, changes in the job finding and job separation rates decreased the crime rate in the United States, but increased it in the United Kingdom. Changes in the unemployment insurance rates and age distribution also contributed to the reversal.