The Effect of Youth Crime on the Macroeconomy

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The problem of youth violence has a negative impact on the US macroeconomy. For several decades, the US economy has been devastated by the issue of juvenile violence, which has resulted in a large amount of government funding in an effort to mitigate the challenge. Notably, the increased crime rate among youths is due to low incomes, especially for unskilled staff. Young people are more receptive to price rewards. If these young people have enough resources to meet their basic needs, the likelihood of them engaging in illegal activity decreases. Crimes stifle economic activity and reduce the nation’s GDP level. Owing to the terrible downturns that the youth cause to the economy, it becomes vital for the government and the entire society to enact measures driven at preventing and treating youth crime. The offending program accreditation committed has to drive at fostering personal touch. Besides, the early intervention strategies directed to children under the age 12 have to be incorporated in the attempts to curb youth crime.

Correlation of Lower Wages to Higher Crime Rates

Responsive to Price Incentives

The young people are primarily responsive to price incentives. Undoubtedly, the less income the youths earn through the genuine ways, the more the probability of them becoming criminals. Therefore, it follows that the more money the youths have in their pockets, the probability of becoming criminals is reduced. Bastiaens (2006) argues that the problem of low wages is particularly experienced among the poor and thus the youth responsive to incentives becomes a worrying aspect. According to Bastiaens, the relationship between poverty and criminality is “so tenuous that any assertions about the effect of wage hikes on reducing crimes among the working poor are inappropriate” (Bastiaens, 2006). Thus is the youths are made to have more money, the rate of crime in the US will be reduced. It has to be clear that a country poor labor markets have a huge impact on youth crime rates. Monetary gain is typically the motive in undertaking crimes such as murder and other violence. The youths are basically motivated by the poor economic conditions of prices which make them turn to crime. Owing to the responsiveness that the youth have towards price incentives, the government has to enact measures that will see the youths become employed and earn better wages.

Lowe Income

Economic reasoning and the increased body of literature have shown that a strong correlation exist between low wages and the rate of youth crime in an economy. Arguably, the low wage income makes the youth to have little income which is not able to sustain all their needs. As a result, these youths resolve to undertake criminal activities in illegitimate ways like stealing and causing violence in order to raise their income level. Whilst government devotes itself to fighting the youth crime, one of the initiatives has to incorporate the need for increasing the youth wage rates. Harris et al. (2016) indicate that if this is not taken into consideration, the public officials will continue to enact tougher laws concerning youth crime but their efforts will always dwindle. Passing of sentencing youth crime laws is not the solution to fighting youth crime. In attempts to reduce the menace of youth crime, the underlying factor that causes the youth to become criminals has to be investigated. Unemployment and low-income levels drive many youths into becoming criminals. According to Bastiaens argument, it is documented that the crime rates of the nation rose in 1979-1992 owing to the declines in wages of the less skilled personnel (Bastiaens 2006). However, the crime rates showed to have substantially declined in 1993-1997. The slight increase in the unskilled wage rates across the nation explains the drawn chart between 1993 and 1997.

The National Bureau of Economic Research (2017) mentions that there is a high correlation between the youth criminal behavior and the wages rates. It is further asserted that the theory behind youth crime and level of wages strictly explain the reasons why the country has registered an increased youth crime for the past 20 years which comes as a result of the decreased wages. Certainly, increasing the wages by 10% would culminate into a reduction in youth crime of 6-9% (National Bureau of Economic Research, 2017). In explaining the increase in crime over the past 20 years, the statistics table by the Bureau of Labor Statistics is alarming. For the past 20 years, the Bureau of Statistic indicates that the wages that are paid to the youths aged between 16-24 years have considerably fallen by around 20.3% (National Bureau of Economic Research, 2017). Furthermore, the paid wages to the unskilled men is registered to have fallen by 23%. On the other hand, data from the Federal Bureau of Investigation indicate that, for the past 20 years, the arrests of youths aged 16-24 rose by 44.6%. Thus, better wages have to be offered to the youths to reduce the prevalence of youth crime.

Cost of Youth Crime

Cost of the Youth Crime to the US Economy

The increase in youth crime has been an epidemic to the US economy. The youth crime costs the country $158 billion dollars annually in the efforts to deal with the youth criminal activities. This is a substantial percentage of the GDP which could have otherwise been put to other useful activities that will be beneficial to the country. The country spends a lot of money in the treatment of the victims who are injured from the youth violence and criminal activities. The clinical and medical expenses incurred add to the cost that the youth crimes have to the economy. Sadly, some of the violence result into the death of the most valuable skilled personnel. Besides the medical expenses, the government also incurs more dollars in the investigation process of these crimes. Therefore, the high clinical costs that are incurred in the treatment of the injured along with the investigation expenses tend to largely drain the country.

Juvenile Programs & Institutions

Apparently, the country also spends more money on Juvenile Programs & Institutions.

The juvenile criminality has continued to be a severe issue to the American society which culminates into a significant financial burden of $158 billion dollars in a year. Possibly, it becomes a necessity to do a reallocation and a readjustment attitudes to help in combating, preventing and treating youth violence. Through this aspects, the government is called upon to fund these programs to ensure efficiency and sustainability. Investigating the funding of imprisonment and the economic spending on the juvenile programs and institutions reveals disturbing statistics. Indeed, shifting of the resources from the imprisonment of the youths to the social programs will considerably lead to a reduction in the level of crime committed by the youths. The nations thus spend a lot of the taxpayer’s money on the juvenile costs with the thought that this would reduce the crime rate. Certainly, the juvenile programs and institutions aimed at preventing youth crime is also a burden to the economy.

Fixing the Problem and the After Effect

Cost Saving

Devoting measures directed at combating youth crime will result in a significant cost saving to the US economy. Undoubtedly, if the country has to reduce the rates of youth crime by 6%, the cost incurred on the youth crime will also reduce by 20%. The country has to develop an interest in the youth crime prevention and interventions have to be formulated to realize the stated outcomes. Particularly, the money allocated towards the incapacitation and punishment of the youth has to be directed at increasing the wages of the youths to benefit the economy and become less costly. Arguably, in dealing with the problem of youth crime, little attention is devoted towards the costs it exerts to the economy and consequently, the US has continued to spend more and more dollars which only strain the budget. The spending is indeed troubling and hence, the government should enact the prevention and treatment measures. This will be cost-saving to the economy and thus relieve the taxpayer the burden of funding youth crimes

Proposed Solutions

Offending Program Accreditation Committee

The Offending Program Accreditation Committee significantly help the youths to gain value and skills that help them in life and this reduce crimes. Thus the government has to facilitate the Offending Program Accreditation Committee as a proposed decisions in preventing youth crime. This will help in determining if the desires of the youth are met and addressed. Measures tailored at supporting the youths will be enacted and the Program Accreditation is a guiding principle in offering training and educational programs to the youths. The appropriate support and guidance will be offered. Delinquency and youth crime studies have reported that a strong relationship exists between the past and the future behavior of a child. The youths who end up committing large crimes were modeled by the past environment in which they interacted.

The official spending on the youth crime investigation can hypothetically be directed to large-scale programs that will see a reduction in the juvenile costs and improvement on the child’s self-esteem, socialization and functionality if the family. The juvenile programs and institutions create a high-cost curve impacting on the macroeconomic level. It also costs a lot in providing the juvenile programs to large scale is more challenging. Therefore, the youth criminal has become both a public issue and a criminal justice concern. The cost incurred on the public include carrying out of public campaigns and through treatment and intervention. The American cities spend approximately $ 50 billion annually on youth violence and crime. The high negative externality calls for both societal and government interventions. Incorporating new social spending and high-quality care will culminate into a reduction in the juvenile costs.

Early Intervention

Fighting the youth crime challenge has to start at a young age and provision for prevention and treatment strategies be accorded to these children. Criminal activities of the youth could be curtailed if these prevention measures aim at identifying the tender age of children below 12 years and modeling them into becoming responsible citizens. As noted before, there is a strong relationship between the past and the future life of an individual. Providing early intervention strategies will prove to be a leading intervention towards combating youth crime. Significantly, devoting more attention to the preschool intervention programs will help in upbringing the children who will grow up and become accountable individuals to their nation. As Harris et al. (2016) indicate, a 20% increase in institutional programs of the youth will result in a 40% decrease in the youth crime participants and thus directly reduce the youth crime rate.


The problem of youth crime is indeed devastating to the economy. Youth crime presents a lot of financial burden to the government and the entire society. There is a high correlation between the youth crime rate and the wage rate. Youths are more responsive to price incentives and attempts to increase their personal income through increasing wage will prohibit them from seeking more income from illegitimate means. Ending the youth crime will result in cost saving. Annually, the US spends $158 billion dollars in tackling youth crime. The juvenile expenses in the programs and institutions also present to be costly to the government. Thus preventing the youth crime will help the country in saving the money is spends in annually. These prevention strategies have to incorporate Offending Program Accreditation Committee along with early intervention strategies of children below age 12.

Annotated Bibliography (Youth Crime and Effects on Macroeconomics)

Bastiaens, Leo J., MD. (2006). “Youth Aggression: Economic Impact, Causes, Prevention, and Treatment.” Youth Aggression: Economic Impact, Causes, Prevention, and Treatment. Psychiatric Times. Retrieved on 2 Feb, 2017 from

This article talks about the cost of youth violence across the country. According to the article the youth violence as said to cost the US county $158 billion dollars annually. Oddly enough, that cost doesn’t even take into the cost of juvenile programs and institutions. It was also mentioned if we could identify and fix 6% of the crime issues, it would reduce that cost by 20%. Some of these costs are also contributed by health, treatment, and campaigns.

Harris, Benjamin H., and Melissa S. Kearney.(2016). “Ten Economic Facts about Crime and Incarceration in the United States.” Brookings. Brookings. Retrieved on 2 Feb, 2017 from

One particular part of this article caught my eye. It states “low-income youths are more likely to engage in violent and property crimes than are youths from middle- and high income families. Essentially another article about how low income correlates to more likely being involved in crime compared to a higher income family.

National Bureau of Economic Research. (2017). Higher Youth Wages Mean Lower Crime Rates.” Higher Youth Wages Mean Lower Crime Rates. National Bureau of Economic Research. Retrieved on 2 Feb, 2017 from

What this article speaks to is the correlation of wages to crime rates among the youth. It found that the higher the wages are for the youth, the lower the crime rates are for them. The article references the 1980 National Longitudinal Survey of Youth, stating that men are more responsive to incentives to price. According to the article “the more money they can make through legitimate means, the less likely they are to commit crimes” This is essentially saying that if the youth don’t have the money to make their means, they will commit crimes in order to make those means. Thus with higher wages, the crime rate is lower for those of the ages between 14 and 21.


Bastiaens, Leo J., MD. (2006). Youth Aggression: Economic Impact, Causes, Prevention, and Treatment.Youth Aggression: Economic Impact, Causes, Prevention, and Treatment. Psychiatric Times. Retrieved on 2 Feb, 2017 from

Harris, Benjamin H., and Melissa S. Kearney. (2016). Ten Economic Facts about Crime and Incarceration in the United States. Brookings. Retrieved on 2 Feb, 2017 from

National Bureau of Economic Research. (2017). Higher Youth Wages Mean Lower Crime Rates. Higher Youth Wages Mean Lower Crime Rates. National Bureau of Economic Research. Retrieved on 2 Feb, 2017 from

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