The Natural Rate of Crime

The natural rate of crime suggests that there will be a pool of individuals who experience very low returns to legitimate labor market activity (job search and work), for whom the pecuniary and non-pecuniary rewards from committing crime will always outweigh the expected costs. For these individuals, increasing expenditure on law enforcement may lead to a short-run decline in the crime rate, but in the long run, they will become increasingly more organized in their responses and, through learning by doing, offset the efforts of law enforcement. The result is that, in the long run, crime committed by these individuals will return to its natural rate with a higher equilibrium level of law enforcement expenditure. This chapter discusses the conceptual basis of the natural rate of crime, the implications of the natural rate of crime for criminal justice policy, and the economic model of crime more generally, as well as critique the existing empirical evidence. The chapter concludes through making some suggestions for future research to move our understanding of the natural rate of crime forward.