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Crime, Human Capital, and the Impact of Different Taxation

Research output: Working paper

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Crime, Human Capital, and the Impact of Different Taxation. / Lim, King Yoong; Jia, Pengfei; Raza, Ali.
Lancaster: Lancaster University, Department of Economics, 2018. (Economics Working Paper Series).

Research output: Working paper

Harvard

Lim, KY, Jia, P & Raza, A 2018 'Crime, Human Capital, and the Impact of Different Taxation' Economics Working Paper Series, Lancaster University, Department of Economics, Lancaster.

APA

Lim, K. Y., Jia, P., & Raza, A. (2018). Crime, Human Capital, and the Impact of Different Taxation. (Economics Working Paper Series). Lancaster University, Department of Economics.

Vancouver

Lim KY, Jia P, Raza A. Crime, Human Capital, and the Impact of Different Taxation. Lancaster: Lancaster University, Department of Economics. 2018 Jan. (Economics Working Paper Series).

Author

Lim, King Yoong ; Jia, Pengfei ; Raza, Ali. / Crime, Human Capital, and the Impact of Different Taxation. Lancaster : Lancaster University, Department of Economics, 2018. (Economics Working Paper Series).

Bibtex

@techreport{a8d2ec3c11644c97b8b71aae519cd475,
title = "Crime, Human Capital, and the Impact of Different Taxation",
abstract = "This paper presents a macroeconomic model with crime, human capital, and three taxation policies (consumption, labour, and capital income taxes). In an extension, we endogenize the probability of escaping punishment to depend on government expenditure on public security/police. The model is solved analytically and numerically to derive propositions, which are then verified empirically using cross-country data. Compared to the literature, we find a much higher threshold probability. Above the threshold, the equilibrium crime rate is positively related to the escape probability. In addition, above this threshold level, a rise in capital income tax or a decline in labour income tax would lead to a higher equilibrium crime rate, if the taxes are modelled using marginal tax rates. There also appears to be empirical supports where the equilibrium human capital level depends positively on consumption tax. Lastly, when the probability is endogenized, there also exists a threshold level for the spending on public security/police, above which consumption tax and capital income tax have positive e¤ects on the equilibrium level of human capital.",
keywords = "Apprehension risk, Crime, Human Capital, Police Spending, Taxation",
author = "Lim, {King Yoong} and Pengfei Jia and Ali Raza",
year = "2018",
month = jan,
language = "English",
series = "Economics Working Paper Series",
publisher = "Lancaster University, Department of Economics",
type = "WorkingPaper",
institution = "Lancaster University, Department of Economics",

}

RIS

TY - UNPB

T1 - Crime, Human Capital, and the Impact of Different Taxation

AU - Lim, King Yoong

AU - Jia, Pengfei

AU - Raza, Ali

PY - 2018/1

Y1 - 2018/1

N2 - This paper presents a macroeconomic model with crime, human capital, and three taxation policies (consumption, labour, and capital income taxes). In an extension, we endogenize the probability of escaping punishment to depend on government expenditure on public security/police. The model is solved analytically and numerically to derive propositions, which are then verified empirically using cross-country data. Compared to the literature, we find a much higher threshold probability. Above the threshold, the equilibrium crime rate is positively related to the escape probability. In addition, above this threshold level, a rise in capital income tax or a decline in labour income tax would lead to a higher equilibrium crime rate, if the taxes are modelled using marginal tax rates. There also appears to be empirical supports where the equilibrium human capital level depends positively on consumption tax. Lastly, when the probability is endogenized, there also exists a threshold level for the spending on public security/police, above which consumption tax and capital income tax have positive e¤ects on the equilibrium level of human capital.

AB - This paper presents a macroeconomic model with crime, human capital, and three taxation policies (consumption, labour, and capital income taxes). In an extension, we endogenize the probability of escaping punishment to depend on government expenditure on public security/police. The model is solved analytically and numerically to derive propositions, which are then verified empirically using cross-country data. Compared to the literature, we find a much higher threshold probability. Above the threshold, the equilibrium crime rate is positively related to the escape probability. In addition, above this threshold level, a rise in capital income tax or a decline in labour income tax would lead to a higher equilibrium crime rate, if the taxes are modelled using marginal tax rates. There also appears to be empirical supports where the equilibrium human capital level depends positively on consumption tax. Lastly, when the probability is endogenized, there also exists a threshold level for the spending on public security/police, above which consumption tax and capital income tax have positive e¤ects on the equilibrium level of human capital.

KW - Apprehension risk

KW - Crime

KW - Human Capital

KW - Police Spending

KW - Taxation

M3 - Working paper

T3 - Economics Working Paper Series

BT - Crime, Human Capital, and the Impact of Different Taxation

PB - Lancaster University, Department of Economics

CY - Lancaster

ER -