In a Well Functioning Job Market Legal Status Lowers Immigrants' Crime Rate

THE PAPER THAT EARNED PAOLO PINOTTI AND COAUTHOR GIOVANNI MASTROBUONI THE AEJ: APPLIED ECONOMICS BEST PAPER AWARD 2016 EXAMINES CHANGES IN THE CRIMINAL BEHAVIOR OF IMMIGRANTS THAT ACQUIRED LEGAL STATUS BECAUSE OF THE EUROPEAN UNION ENLARGEMENT

A study on criminal activity among legal and illegal immigrants has earned Paolo Pinotti (Department of Policy Analysis and Public Management) and co-author Giovanni Mastrobuoni  (University of Essex) the AEJ: Applied Economics Best Paper Award 2016.
 
In Legal Status and the Criminal Activity of Immigrants (in American Economic Journal: Applied Economics, 7(2): 175-206, doi: 10.1257/app.20140039) Pinotti and Mastrobuoni conclude that, in a well functioning job market, the propensity of immigrants to commit crimes depends heavily on their legal or illegal status, with legal status leading to a 60% reduction in recidivism.
 
The authors exploit  the combination of two events. In August 2006, a collective pardon in Italy – the so-called “indulto” – resulted in the release of 22,000 inmates, including almost 10,000 foreigners. Five months later, on 1 January, 2007, Romanians and Bulgarians acquired legal status as a consequence of the European Union enlargement. Pinotti and Mastrobuoni compare the recidivism of this group with that of immigrants from candidate member countries (Albania, Montenegro, Turkey, Bosnia and Herzegovina, Croatia, Iceland, Kosovo, and Serbia).
 
In the five months between the pardon and the enlargement, the two groups exhibit the same recidivism rate – about 5.8%. In the five months after the enlargement, however, the recidivism of Romanians and Bulgarians decreases to 2.3%, while no change is observed for the other group. Therefore, access to legitimate income opportunities in official markets seems to lower the propensity to commit crimes.
 
“From a policy perspective”, prof Pinotti says, “you can read the results in two ways. On the one hand, our findings suggest that the consequences of migration policy depend crucially on enforcement. Whatever level of migration quotas is fixed, it should be enforced, in order to prevent the formation of a pocket of illegal immigrants. On the other hand, one could argue that the quotas should be generous enough to avoid incentives to illegally enter a country”.
 
The drop in recidivism rates is large but not homogeneously distributed across Italian regions. “In the South, where a larger informal labor sector exists and the formal job market is less efficient, the effect is paltry, because landing a regular job remains difficult even after acquiring legal status”.
 
The AEJ Best paper Awards are assigned each year to the best article published in each of the four American Economic Journals.

by Fabio Todesco