Wednesday, March 10, 2004

Marginal Revolution

Tyler Cowen comments on the study done by U. Chicago economist Steve Levitt and John Donohue. This study proposed that the drop in crime in the 90's directly correlates to the legalization of abortion in the 70's, not the increased spending on crime that Rudy, linton and Co. claimed actually caused it.

In brief, the evidence for the Levitt-Donohue theory is a) the timing is consistent, b) states that legalized earlier had earlier drops in crimes, c) there is a dose-response effect i.e. states that had more abortions had bigger drops in crime, d) the drop in crime in the 1990s occured among those cohorts who were potentially affected by abortion policy in the 1970s (and not among say 40 years olds.)

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