Poverty, Crime and Causality

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Yves here. There’s another factor worth considering in this analysis: that some families whose members are guilty of criminal conduct are better at having them escape the legal/social sanction repercussions. One can be in a high income stratum without necessarily having the social capital to ameliorate the consequences of bad actions. Notice that this study includes “substance misuse”. I don’t know how stringent the authorities are in Sweden, but kids who go to elite colleges in the US are virtually never turned in for drug use or even drug dealing; the most they get is a scolding and a call to their parents. Similarly, rapes are regularly covered up, with the woman often arm-twisted not to go beyond the campus police and press charges. So while this study makes an important finding, there is a big gap between crimes that wind up being prosecuted versus actual criminal activity where well-connected perps are allowed to get off with minimal to no consequences.

By Mike Kimel. Originally published at Angry Bear

I was bouncing around my twitter feed and landed on this tweet which in turn took me to a paper entiteld Childhood family income, adolescent violent criminality and substance misuse: quasi-experimental total population study. The paper appeared in the British Journal of Psychiatry in 2014. Here’s the basic summary:

Low socioeconomic status in childhood is a well-known predictor of subsequent criminal and substance misuse behaviours but the causal mechanisms are questioned.

To investigate whether childhood family income predicts subsequent violent criminality and substance misuse and whether the associations are in turn explained by unobserved familial risk factors.

Nationwide Swedish quasi-experimental, family-based study following cohorts born 1989–1993 (ntotal = 526 167, ncousins = 262 267, nsiblings = 216 424) between the ages of 15 and 21 years.

Children of parents in the lowest income quintile experienced a seven-fold increased hazard rate (HR) of being convicted of violent criminality compared with peers in the highest quintile (HR = 6.78, 95% CI 6.23–7.38). This association was entirely accounted for by unobserved familial risk factors (HR = 0.95, 95% CI 0.44–2.03). Similar pattern of effects was found for substance misuse.

There were no associations between childhood family income and subsequent violent criminality and substance misuse once we had adjusted for unobserved familial risk factors.

Declaration of interest

Because the British (let alone the Swedes) seem incapable of doing proper American, it might be worth translating the paper into something we English speakers can follow. Here goes. The study looked at 526,167 Swedish kids, or about 89% of all kids born in Sweden from 1989 to 1993. (Kids were excluded from the sample if they died or emigrated before their 15th birthday, if they were born with birth defects, if they couldn’t be linked to their birth parents, or if the authors were unable to determine the parents’ level of income.)

The authors found (no surprise to anyone) that kids born into the lowest income twentieth percentile of the population are far more likely to get convicted of violent criminal activity or become substance abusers. But, by accounting for changes in a family’s income over time and how that affected (or didn’t) criminality and substance abuse outcomes of siblings and cousins, the authors were able to conclude that a family’s income was not associated with violent criminal activity or substance abuse except insofar as income was being driven by some other unobserved factor(s) that itself was associated with negative outcomes. That unobserved factor (or factors) runs in families.

The authors are not as clear as I’d like in describing the data adjustment, and the process they use is not one I have employed myself at any point.  But if I understand the limited description of the process correctly, they are basically noting that a kid in a 60th percentile income family is no less likely to become a criminal than his younger brother will be several years later when the family has dropped to below the 20th percentile of income.   Furthermore, within each income level, crime tends to run in families.

To take the paper’s findings a bit further, there is a serious implication here: it isn’t so much that poverty drives people into crime, but that families whose members have a tendency toward criminal behavior have an increased likelihood of ending up poor. Perhaps those who lack empathy are both more likely to commit crimes and less willing or able to behave in ways that allow them to get and retain good jobs. Of course, some of the smarter criminals can fake empathy enough to do quite well for themselves. It is also important to note that most poor people are not criminal. Nevertheless, the reason crime correlates with poverty is not that poverty leads to crime, but rather that for a not insignificant piece of the population, criminal tendencies is associated with traits that increase a person’s likelihood of being in poverty.

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  1. Tomonthebeach

    So many economic studies fail to consider psychological factors, and I do not mean mental illness. What might drive youth to commit crime based upon economic quintile? Might it have something to do with access to money to fulfill peer-group shared needs?

    Regardless of socioeconomic quintile, all children are exposed to the same advertising and subsequent peer pressure meant to instill wants and subsequent purchasing behavior. By 14, most kids in industrialized nations (and many in poor ones) know that they “NEED” an iPhone, they NEED the latest Nike sneakers, they NEED NEED NEED stuff.

    If perceived NEED is a relative constant across quintiles, but financial wherewithal varies linearly across quintiles, NEED fulfillment at the lower end must logically involve obtaining goods by extra-financial means – and extra-financial means are usually not legal.

  2. Jesper

    If the world was meritocratic then a smart hardworking individual from poor circumstance could make an honest living and climb out of poverty. However, the world isn’t meritocratic so the smart hardworking individual might do what Tony Montana (Scarface) did – say “F**k this, I’m better than this” and go into crime.

    Police in Sweden used to have it easy (when unemployment was low and there were opportunities for ALL), the criminals weren’t very bright. Now the police say that criminals are brighter and should have been able to make a good honest living. So, cronyism instead of meritocracy -> smarter criminals….

    1. johnnygl

      To really reinforce the point you are making, which i think has some validity, around a decade ago an organized gang in Brazil robbed a branch of the central bank. I think bloomberg still has a story up if you google it. It was this ridiculously complex ocean’s 11 style of operation. The gang got away with hundreds of millions of reais. I recall showing it around the office and having a laugh with coworkers.

      If you want a country with lots of cronyism and few opportunites to move up….Brazil is a kind of poster child for this.

  3. tony

    Martin Daly looked at the crime rates in Chicago and the income inequality in the neighbourhood explained 0.7 of variance of in the male-to-male homicide rate. He wrote Killing the Competition, where he argued that murder was largely a rational reproductive strategy as the poor men saw no other way of gaining the status needed to gain access to attractive women.

    In an equal neighbourhood homicide was less of an issue, since just getting a job could increase your status enough to make a difference.

  4. SA

    I have a couple of comments. The study counts convictions, which are are easy to count; but, at least here in the U.S., the likelihood of criminal conviction seems to be inversely correlated with wealth. I think further that the mere likelihood of arrest, again in the U.S., depends on socioeconomic status—for example, the partisans of “broken windows’’ policing never favor popping patrons of expensive nightclubs for drug possession, although any fool knows how prevalent drugs are among the “higher” classes. There is also the rarity of arrests for white-collar criminal behavior; because arresting sociopaths with a sense of entitlement might injure the entrepreneurial class that is so beloved of right-wing economists.

  5. PlutoniumKun

    In my limited personal experience, I think its a given in almost any society, from the most unequal to countries like Sweden that people who are ‘connected’ (which as Yves points out, is not always the same as being rich) are less likely to be charged or convicted of violent crimes. Police will always tread more lightly when dealing with the wealthy and connected and are more likely to, for example, defer to the authority of the principal of an expensive private school than a local public school if an ‘incident’ occurs.

    As for violent crimes though, there is copious evidence that some forms of violent crime run through families in an endless cycle of children being brutalised and in turn inflicting the same on their own families. Any social worker will tell you that its a very difficult cycle to break.

    1. Mike

      I agree, and a look at the trend lines of such judicial outcomes shows this society doubling down on the guaranteed “innocence” of elite members, with the public acknowledgement that tells the poor to live with it, or die fighting it.

      We should be looking at the psychological result of such class warfare as a function of rising and falling hopes in the system to deliver any security or advance for its poorest citizens. Being poor in this society almost guarantees dislodgment of what the elites may call “civilized behavior”, and produces individuals that exhibit asocial and even self-wounding behaviors. Desperation breeds this, and our “open” society shows desperate people what they are missing. Crime, as defined by elites, basically says these lower branches of humanity express themselves in such manner because it is ingrained and their social status proves that. The amazing thing is the rarity of such “uncivilized” behavior among the poor- one would think it to be far more prevalent.

      How do we fight this in a manner that wins over those convinced of this point who must be on our side?

  6. Sound of the Suburbs

    Do the maths:

    The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living

    Purchasing power = wages – (taxes + the cost of living)

    Low wages and a high cost of living do not compute.

    We must get the cost of living down to compete internationally, this sets the minimum wage.

    A Chinese wage would have you living in the gutter in the UK.

    It hasn’t changed:

    The repeal of the Corn Laws to usher in the era of Laissez-Faire.

    The aristocratic landowners wanted high corn prices to get more land rent.
    The businessmen wanted lower corn prices, to lower the cost of living for lower, internationally competitive wages.

    They know the importance of the cost of living in the 19th century but we don’t in the 21st.

    What happened?

    The Classical Economists of the 19th Century were only too aware of the two sides of capitalism, the productive side where wealth creation takes place and the parasitic side where wealth extraction takes place.

    The US was a key player in developing neoclassical economics and it’s what we use today. It looks after the interests of the old money, idle rich rentiers.

    The distinction between “earned” income (wealth creation) and “unearned” income (wealth extraction) disappears and the once separate areas of “capital” and “land” are conflated. The old money, idle rich rentiers are now just productive members of society and not parasites riding on the back of other people’s hard work, but they are.

    “Income inequality is not killing capitalism in the United States, but rent-seekers like the banking and the health-care sectors just might” Nobel-winning economist Angus Deaton

    It may be hidden in economics but it appears in the real world.

    US maths:

    The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
    Purchasing power = wages – (taxes + the cost of living)
    Purchasing power = 0

    Another payday loan Sir?

    In the old world, the old money, idle rich (Aristocracy) were a big problem for the early capitalists with their rent seeking ways.

    Their rents had to be covered in wages by the productive capitalists.

    In the new world, inherited wealth has formed an old money, idle rich (oligarchy) and they are a pig problem for today’s capitalists with their rent seeking ways.

    Their rents have to be covered in wages by the productive capitalists.

    Today’s capitalists off-shore for cheaper labour and leave US workers to rot.

  7. Sound of the Suburbs

    Create competition for scarce resources and watch the tension rise.

    Keynes knew what would happen when Germany was squeezed with reparations after the First World War.

    Try some austerity to increase the tension.

    Golden Dawn = mass youth unemployment + mass immigration + austerity + recession.

    It’s easy when you know how.

    Austerity has been good for turning people against migrants.

  8. HBE

    Another factor related to the divergent outcomes of the well off, is that their schools (private) often don’t have “school resource officers”, who start forcing children into the legal pipeline in elementary school, for things at any other point in time would have ussaully resulted in a scolding or breakfast club like punishment.

  9. johnnygl

    The documentary ’13th’ that came out on netflix recently makes a very valid point which would skew usa data. They pointed out that the power of prosecutors and cost-prohibitive bail means that they can force defendants to accept punitive plea bargains. In fact, the documentary points out that the overwhelming majority of prisoners never see a court room because they need to take a plea deal under duress.

    Because of the lack of due process and because we know how heavy the police presence is in places like Baltimore and Ferguson. It seems tenuous to conclude that conviction rates have much of anything to do with crime rates.

  10. Greg M.

    Thanks for this. It syncs nicely with my work in ACEs — or Adverse Childhood Experiences. There was a study done in the late 90s by Dr. Vincent J Felitti, sponsored by the CDC and Kaiser Permanente, on the impact of childhood trauma on health. His team demonstrated a link between adverse conditions in the home — e.g. domestic violence, parent incarcerated, neglect, and poverty — and negative short and long-term health outcomes. ACEs exposure leads to a higher risk of outcomes like substance abuse, criminality, depression, heart disease, asthma and the like.

    What’s worse, trauma replicates. Put another way, we inherit our parents’ ACEs and have a high likelihood of passing them down to our kids, without some intervention. So it is not a surprise that you have generations of conditions like criminality, teenage pregnancy, substance abuse, domestic violence etc. Low income communities are filled with people who have trauma in their backgrounds, sometimes excessively so. As a general rule, lasting behavior change is incredibly difficult to achieve because we are, in essence, rewiring our brains to create that change. Many people in these populations are unable to find the support needed to change their brains and their surroundings. Intervention matters though and the medical and education communities need to be better informed on the impact of this trauma. It’s happening slowly and surely.

  11. RUKidding

    If anyone believes that wealthy white people, or even comfortably off white people, aren’t engaging in as much, or more, criminal activity as those who are poor, especially if they’re minorities, are engaging in Magical Thinking. It’s the Magical Thinking so beloved of our society these days, where all white people, especially those who are either rich and/or overtly “religious,” are de rigueur models of exemplary and correct behavior, while the the poorz, esp minorities, are a priori bad, at best, or criminals at worst.

    As Yves stated, there’s loads of evidence of rapes, drugs, drug dealing, theft and violence at top schools across the country, whether public or private, but most keep the criminal behavior under wraps and the kids get away with it. And then many of them go on to become sociopaths who are looked up to as leaders and captains of industry. Whereby, these wealthy scions may cease some of their childhood criminal behaviors, only to exchange these for more egregious so-called “white collar” crimes.

    The poor, otoh, are typically dealt with harshly from the get-go, and we all know the stats on the numbers of minorities who are incarcerated v. whites. And so it goes…

    Another blog I was reading this morning pointed me to a ZeroHedge article about how Food Stamp use dropped when AL instituted legislation requiring SNAP beneficiaries to be employed or looking for work (something like that; not quoting exactly). The comments section was incredibly racist with commenters blasting minorities, in particular, but also Jews (go figure). Only one commenter pointed out that the rich were ripping off citizens much more than alleged scofflaw SNAP beneficiaries. This commenter was resoundingly dissed for even suggesting such a thing.

    So these kinds of studies really seem to be just reinforcing the mentality that rich/white = good, poor/minority = criminal. Thus adding fuel to the divide and conquer class warfare fire.

    1. Warren

      So wealthy white people are going into inner-cities to commit crimes, and that’s why the crime rates in those areas are so much higher than in the suburbs?

      1. Democrita

        No, wealthy people get high, cheat on their taxes, rape their peers, steal time from their employees, etc. in the comfort of homes and institutions where no one bothers them about it. That’s why the crime rate in their neighborhoods is so low.

        If cops did stop-and-frisk on elite college campuses, or better yet Wall Street, our drug laws would be changed in a week.

          1. Yves Smith Post author

            You clearly haven’t spent any time on Wall Street or for that matter, with kids in elite prep schools.

            And an ad hominem attack, a violation of site rules.

      2. RUKidding

        Yeah, No. Nifty canned response taken directly from Rush, Fox and dozens of rightwing websites.

        I specified exactly what types of crimes white middle to upper class people are doing, most of which are way more deleterious to our nation/society/culture than even black on black crime in the lower income areas of our country. You can either read my post thougtfully, or you can choose to ignore the facts discussed there and indulge in your magical thinking.

        Up to you.

  12. perpetualWAR

    If this study included the high income earners that committed crime not prosecuted, like Wall Streeters, there would be a different outcome.

  13. Enquiring Mind

    Criminals I have known all shared a lack of sense of guilt and typically had not much empathy either. They did not see anything wrong with their actions, and resented anyone trying to make them look too closely at themselves. They spanned the SES spectrum. Factor in a higher internal discount rate (I want it now, not later) and less of a cause-effect appreciation and that leads to some profoundly life-shortening, or at least life-worsening decisions, at least to the casual observer.

    Awaiting research on presence or absence of some gene(s) that contribute to such outcomes.

  14. Nicholas Alanis

    There is definitely this conception among the general public that there is a causality between poverty and crime. However, in addition to psychological factors, a major issue lies between the haves and have nots. We have seen wealthy college students and high profile athletes get away with horrendous acts in school due to their social standing and the pull of their parents while others have the hammer brought down on them. Keep up the great work as your blog is very informative and thought provoking.

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