Family Income, Neighborhood Poverty, and Crime

Heller, Sara, Jacob, B.A., Ludwig, Jens. (2011). “Family Income, Neighborhood Poverty and Crime.” In Making Crime Control Pay: Cost-Effective Alternatives of Incarceration, edited by Philip J. Cook, Jens Ludwig and Justin McCrary. Cambridge, MA: National Bureau of Economic Research.


Individual poverty and its geographic concentration have long been considered potential “root causes” of crime. This chapter considers whether policies designed to alleviate individual poverty or the geographic concentration of poverty affect criminal behavior. We lay out a simple model of juvenile crime that helps to highlight how different potentially relevant mechanisms interact. We believe the available evidence suggests that selected policies to address individual- or neighborhood-level poverty can affect criminal behavior, although teasing out the mechanisms behind these reduced-form policy impacts is complicated. However, the scope for reducing crime by de-concentrating poverty is complicated by our limited understanding of how to reduce concentrated poverty on a large scale through public policy interventions, as well as the limited information that is currently available about the general equilibrium effects of such policies. While increasing the income of poor families is likely to decrease their criminal behavior, this strategy’s effects may depend on the specific design of the income transfer program. More generally, such policies may be less cost-effective than directly targeting the skills and development of children.

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