We use unique and detailed register data on victimizations and monthly labor market outcomes from the Netherlands and estimate event study designs to assess short-term & long-term effects of criminal victimization [600,000 victim].

Across offenses, both males and females experience substantial decreases in earnings (up to −12.9%) and increases in benefit receipt (up to +6%) after victimization. The negative labor market responses are lasting (up to 4 years) and accompanied by shorter-lived responses in health expenditure.

Heterogeneity results suggest that most groups of victims, including the non-injured, suffer nontrivial losses.

…This paper begins to fill this large knowledge gap by studying 3 fundamental questions. First, what are the effects of criminal victimization on individuals’ labor market outcomes, including earnings (labor income) and social benefit receipt? Second, are labor market effects temporary, or do they persist over time? Specifically, we consider short-run (“scaring”) effects, after which labor market outcomes would return to pre-victimization levels, and long-run (“scarring”) effects, which would lead to a more persistent change in labor market trajectories. Third, why do these effects exist? We shed some light on potential mechanisms by studying health-related expenditures, heterogeneities by gender, and offense characteristics as well as other life events after victimization. We overcome the data limitations previously met in the literature by exploiting unique administrative data on victimization from Dutch police records that can be linked to an 18-year-long panel of labor market register data. Finally, when the offender is known to the police, we observe whether the victim and the offender live (or have lived) in the same household. This allows us to separate out domestic violence cases, which are not registered as a separate offense by the police. This is, to our knowledge, the first study that uses victimization register data to study these questions.

…Our main results show large labor market effects of victimization: one year after the incident, earnings decrease by up to 8.4% for males and 12.9% for females, and benefit receipt increases by up to 5% for males and 6% for females. We find interesting heterogeneities across offenses with respect to the magnitude and the dynamics. For offenses that likely involve physical violence (assault, robbery), the effects are immediate and largest in the short-term, whereas for the other offenses (threat, burglary) there are more gradual changes following victimization. These labor market effects are in many cases accompanied by short-term increases in total and mental health expenditure. Yet they are also seen for victims with no or only modest increases in medical costs—especially among females. Our results reveal further noticeable gender differences. For females, the labor market effects are generally stronger, and the differences in effect sizes between offenses are larger with additional heterogeneities between non-domestic-violence and domestic violence cases. For most offenses, the labor market outcomes do not return to pre-victimization levels within 4 years. A likely explanation for such scarring effects is path dependency: individuals who become unemployed or leave the labor market may not return to work or remain long-term reliant on benefits. Our extensive margin analyses confirm that employment remains lower 4 years after victimization. An additional explanation is that the victimization is a pivotal event: supplementary analyses suggest that later victimizations and criminal involvement as well as other life events (moves and family outcomes) may contribute to these persistent effects.

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