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Costs of Crime

What portion of the U.S. economy is consumed by the societal costs of crime?

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A 2021 paper in the Journal of Law and Economics estimated that crime costs the people of the United States about $4.71–$5.78 trillion per year, including “victims’ losses,” “the direct costs of law enforcement,” the costs of courts, prisons, and rehabilitation programs, “the indirect costs of private deterrence,” the suffering caused by “fear and agony,” and “time lost to avoidance and recovery.” These societal costs of crime amount to 20% to 24% of the U.S. economy. The paper concludes, “Crime exacts a toll on society far greater than its direct repercussions. An environment of crime and concomitant distrust prompts expenditures on prevention, recovery, justice, and corrections. Beyond asset transfers from victim to criminal, losses to crime comprise lives, health, fear, work, human capital, and time.

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