The Thief’s Wages: Theft and Human Capital Development

I use GMM to estimate parameters for a Ben-Porath human capital model to analyze the decision to steal in data from the National Longitudinal Study of Youth 1997 for data from 1997 to 2011. Importantly, wages are as high or higher for thieves during the ages of peak activity, but drop considerably after the period of active theft, making it difficult to point to theft as a substitute for labor. I estimate that thieves have $0.60-0.67/hour less in initial human capital, and discount rates that are 0.3-0.4% lower. In combination these provide a rational basis for the decision to steal.