‘Children of the Wall’: Outcomes for kids born in a crisis
Arnaud Chevalier, Olivier Marie08 November 2014
Children born in crises face different initial conditions. Data on children born in East Germany just after the Berlin Wall came down confirms that this corresponds to worse adult outcomes. ‘Children of the Wall’ have 40% higher arrest rates, are 33% more likely to have repeated a grade by age 12, and are 9% more likely to have been put into a lower educational track. This column argues that these negative outcomes can be explained by the lower average parenting skills of those who decided to have children during a period of high economic uncertainty.
This month, Germany and the rest of Europe celebrate the 25th anniversary of the fall of the Berlin Wall, perhaps the most symbolic moment of the collapse of the communist regimes in Eastern Europe. This event had colossal repercussions for the economic development of the region but also, and maybe less obviously, on its demography. Following the collapse of the Communist regimes, fertility in Eastern Europe went into a sharp decline (United Nations Economic Commission for Europe 2000).
Bart Golsteyn, Hans Grönqvist, Lena Lindahl19 August 2014
Time preference has substantial economic consequences. To a growing literature that shows patience to be an important indicator of economic outcomes, this column presents new evidence from a large administrative dataset that tracks children into adulthood. Those who reported more patient preferences as children move on to better labour market and health outcomes, and are less likely to become criminals.
Randi Hjalmarsson, Helena Holmlund, Matthew Lindquist
It is challenging but necessary to teach children to be patient, as all parents know. In the short run, patience instilled in children can counteract impulsivity and acting-out. Our research shows that impatience predicts a range of subsequent problems in the long run.
Vicky Pryce talks to Viv Davies about her recent book ‘Prisonomics: Behind bars in Britain’s failing prisons’, which analyses the economic and social costs and consequences of women in prison and women’s prisons in the UK. Pryce presents the case for penal reform and provides a number of policy recommendations. The interview was recorded in London in January 2014.
In many settings, criminal behaviour can be analysed just like any other economic decision-making process, namely – as the outcome of individual choices influenced by perceived consequences. This column explains the advantages of adopting an economic approach to understanding crime. Furthermore, criminal law and crime-prevention programmes can be evaluated using the same normative techniques applied to health, education, and environmental regulation.
What have economists contributed to our understanding of criminal behaviour and crime control? Could they help make sense of the recent large crime drop documented in the UK and other countries (Draca 2013, Marie 2010)?
As we approach the fiftieth anniversary of Nobel laureate Gary Becker’s seminal contribution (Becker 1968), the economics of crime is becoming part of the standard portfolio that makes up the discipline. On both sides of the Atlantic, a critical mass of academic economists has specialised in the study of crime and its control, and the field is growing rapidly.
What is the long-term impact of incarcerating juveniles?
Anna Aizer, Joseph Doyle16 July 2013
The US imprisons more young people at a higher rate than any other nation. This column argues that, at a tremendous cost, incarcerating juveniles only serves to reduce their educational attainment and increase the probability of incarceration as an adult. New research suggests that using the numerous available alternatives will probably not only save the US money in the short run – as well as giving juvenile criminals better prospects in the future – but will also reduce future crime and thus future expenditures in the long run.
This paper provides an overview and synthesis of the literatures analysing games where players are connected via a network structure. While it focuses on the game theoretic modeling, it also also include some discussion of analyses of peer effects, as well as applications to diffusion, employment, crime, industrial organisation, and education.
Incarceration is costly – easily €100 to €200 per night per prisoner, depending on the country and the prison regime. That makes €36,500 to €73,000 per prisoner per year, excluding fixed costs of building prisons, and all other costs such as time not spent at work or with the family.
Recent revelations on traders’ behaviour in the Libor rigging case are worrisome not only as a sign of the rotten culture of financial operators, but also for the sense of legal impunity prevailing among them (Economist 2012). They suggest that bank CEOs and supervisors may have tolerated or encouraged rate rigging, or negligently lost control of banks’ operations, for years. They also indicate that law enforcement has been extremely weak in the realm of banking and finance.
Arcangelo Dimico, Ola Olsson, Alessia Isopi13 May 2012
If it were a business, the Mafia would be one of Italy’s most successful and one of the largest in Europe. But how did it come to be so powerful? This column argues that it began with control of the international lemon trade in the 19th century.
The Italian Mafia can be seen as one of the largest and most successful businesses in Italy. In one of the latest reports from the Italian Minister of Home Affairs, it has been estimated that revenues from just the informal sector related to the Mafia amount to almost €180 billion. In terms of GDP, revenues from Mafia-related businesses represent almost 12% of the total Italian GDP and are equal to the sum of the GDPs of Estonia, Croatia, Romania, and Slovenia (Ruffolo et al. 2010).
Can the Mafia divert the allocation of public transfers?
Guglielmo Barone, Gaia Narciso05 May 2012
Can organised crime divert public spending? This column presents evidence of the Mafia influencing public transfers and argues that geographically targeted aid should take into account the risk that at least part of the funding feeds into organised crime.
Organised crime is widely regarded as damaging to economic outcomes – let alone the effects on people’s lives. Yet little is known about the mechanism at work. A recent study by Pinotti (2011) estimates the impact of organised crime on GDP-per-capita in Italy. Pinotti compares Southern Italian regions on the basis of the dynamics and historical roots of different groups involved in organised crime. According to his analysis, organised crime is responsible for a 16% loss in GDP-per-capita over a 30-year period. Bonaccorsi di Patti (2009) shows that crime adversely affects access to credit.