EARNINGS PROSPECTS, MATCHING EFFECTS, AND THE DECISION TO TERMINATE ACRIMINAL CAREER

This study represents an effort to investigate the age pattern of crim inal involvement from an economist's perspective. It presents a dynami c stochastic model of sequential search and match evaluation which is used to explain the reasons for, and the timing of, the decision to te rminate a criminal career. The behavioral implications derived from th e theoretical model are tested using individual National Longitudinal Survey of Youth data. Estimation results strongly support the predicti on of a negative relation between the option value of retaining a crim inal career and desistance decisions. More specifically, the effects o f current and future expected criminal earnings are shown to be negati ve, substantial, and statistically significant in determining desistan ce probabilities. Retiring behavior is also significantly responsive t o variables measuring personal costs of punishment and the availabilit y and attractiveness of a legal income-generating activity in ways con sistent with theoretical expectations.