Debt Problems and Crime*

Abstract

The few existing studies on the association between debt problems and crime have suggested that the two are correlated, but the causal nature and direction of this association has been unclear. By using longitudinal register data (N = 20,696) from Finland on young adults' debt default and crime, we examine the potentially reciprocal association between debt problems and crime with both cross-sectional and longitudinal models. Debt problems and crime have a strong association in the data, which persists after controlling for several measures of socioeconomic status. The longitudinal analyses using fixed-effects regression models show that levels of crime are higher during periods of debt enforcement, ruling out stable between-person heterogeneity as the sole cause. The final analysis examining the exact timing of new debt defaults and crime shows signs of a mutually reinforcing association; the rate of newly enforced debt increases in the months preceding the first crime leading to a conviction and continues to increase afterward mostly because of criminal monetary sanctions left unpaid. The conclusion of the analysis is that debt problems have a dynamic association with criminal offending. We discuss the difficult barrier that unpaid debts pose to offenders seeking to desist from criminal activity in the current Finnish context.

Problem gambling and psychological distress: a cross-national perspective on the mediating effect of consumer debt and debt problems among emerging adults

“…Within the Finnish system, creditors can request a court statement to start enforcement, after which the Finnish state enforcement authorities will take care of the debt. Having been to debt enforcement is an indicator of serious financial difficulties in Finland [ 65 , 66 ]. Followed by the question on debt enforcement, the respondents were asked (a) whether they have taken care of their enforced debt, (b) whether they are still actively paying it back, or (c) whether they are currently considered as temporarily insolvent by the state.…”

Debt problems, home‐leaving, and boomeranging: A register‐based perspective on economic consequences of moving away from parental home

“…The role of major life events on economic difficulties has been demonstrated in previous studies (Aaltonen et al, 2016;Kauppinen et al, 2014;Oksanen, Aaltonen, & Kivivuori, 2015;Sandberg-Thoma et al, 2015). The role of major life events on economic difficulties has been demonstrated in previous studies (Aaltonen et al, 2016;Kauppinen et al, 2014;Oksanen, Aaltonen, & Kivivuori, 2015;Sandberg-Thoma et al, 2015).…”

“…Life-course perspective is grounded on an idea that certain life events and broader transitions and trajectories bring changes in individual behavior. The role of major life events on economic difficulties has been demonstrated in previous studies (Aaltonen et al, 2016;Kauppinen et al, 2014;Oksanen, Aaltonen, & Kivivuori, 2015;Sandberg-Thoma et al, 2015). Life events, such as divorce, may place individuals in an economically vulnerable situation (e.g., Aassve, Betti, Mazzuco, & Mencarini, 2007).…”

“…Furthermore, there are very few nationally representative longitudinal studies on financial debt during early adulthood (Dwyer, Hodson, & McCloud, 2013;Dwyer et al, 2011Dwyer et al, , 2012Houle, 2013Houle, , 2014Sweet, Nandi, Adam, & McDade, 2013). Mostly Nordic researchers have so far used registerbased data for the analysis of financial problems (e.g., Aaltonen, Oksanen, & Kivivuori, 2016;Kauppinen et al 2014;Oksanen, Aaltonen, & Rantala, 2015). It is particularly difficult for traditional survey methods to reach those who are not in employment, education, or training.…”

“…Registerbased studies provide a good solution for the problems indicated in survey studies. Mostly Nordic researchers have so far used registerbased data for the analysis of financial problems (e.g., Aaltonen, Oksanen, & Kivivuori, 2016;Kauppinen et al 2014;Oksanen, Aaltonen, & Rantala, 2015).…”