Police pay and performance

“Crime doesn't pay" may be a debatable axiom, but new evidence strongly suggests that the more crime-fighters are paid, the better they will combat crime. Alexandre Mas, a researcher with the National Bureau of Economic Research maintains that when police officers are awarded salaries below their desires and expectations, both arrest rates and average sentence length will decline, but when police receive their salary demands, arrest rates will rise.

Police performance, Mas finds, declines sharply when officers lose arbitration cases:

The per capita number of crimes cleared (crimes resulting in arrests) is 12 per cent higher in the months following arbitration rulings in favour of police officers.

Felony arrests in cities where police unions lost in arbitration are also associated with lower incarceration probabilities and shorter jail sentences.

This suggests that police may reduce their efforts and co-operation with prosecutors following arbitration losses; that is, the police expend less energy in gathering evidence, or at least in presenting evidence to prosecutors.

In addition, police bargaining unit losses are associated with a 5.5 per cent increase in reported crime rates in the months following arbitration rulings, suggesting less active policing.

Mas finds that the change in performance of New Jersey police officers depends not only on the amount of the pay raise but also on the counter-offer that was proposed but rejected. Comparisons of pay raises to counterfactuals, Mas says, influence police effort when the police lose in arbitration, but such comparisons are not relevant when police win, suggesting that these workers are subject to a form of loss aversion. The degree to which performance declines after an arbitration loss also depends on whether the loss was anticipated, suggesting that whether an arbitration decision is considered a win or a loss depends on employee expectations prior to arbitration.

Source: Matt Nesvisky, Police Pay and Performance, NBER Digest, January 2007; based upon: Alexandre Mas, Pay, Reference Points, and Police Performance, National Bureau of Economic Research, Working Paper No. 12202, May 2006.

For text: http://nber.com/digest/jan07/w12202.html

For study text: http://papers.nber.org/papers/w12202

For more on Crime: http://www.ncpa.org/sub/dpd/index.php?Article_Category=14

FMF Policy Bulletin/ 23 January 2007