New Economics Papers
on Law and Economics
Issue of 2013‒08‒16
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Eurozone Sovereign Debt Restructuring: promising legal prospects? By Miller, Marcus; Thomas, Dania
  2. The Social Impact of a Fiscal Crisis: Investigating the Effects of Furloughing Public School Teachers on Juvenile Crime in Hawaii By Randall Q. Akee; Timothy J. Halliday; Sally Kwak
  3. Does Peacetime Military Service Affect Crime? By Albæk, Karsten; Leth-Petersen, Søren; le Maire, Daniel; Tranæs, Torben

  1. By: Miller, Marcus (University of Warwick); Thomas, Dania (University of Glasgow)
    Abstract: The Eurozone debt crisis has stimulated lively debate on mechanisms for sovereign debt restructuring. The immediate threat of exit and the breakup of the currency union may have abated; but the problem of dealing with significant debt overhang remains. After considering two broad approaches - institutional versus contractual – we look at a hybrid solution that combines the best of both. In addition to debt contracts with Collective Action Clauses, this includes a key amendment to the Treaty establishing the European Stability Mechanism, together with innovative statecontingent contracts and a Special Purpose Vehicle to market them.
    Keywords: Eurozone
    Date: 2013
  2. By: Randall Q. Akee (UCLA, Luskin School of Public Affairs); Timothy J. Halliday (UHERO, University of Hawaii at Manoa); Sally Kwak (U.S. Congress, Joint Committee on Taxation)
    Abstract: Due to the large social costs of juvenile crime, policymakers have long been concerned about its causes. In the 2009-10 school year, the State of Hawaii responded to fiscal strains by furloughing all school teachers employed by the Department of Education and cancelling class for seventeen instructional days. We examine the effects of this unusually short school year to draw conclusions about the relationship of time in school with juvenile crime rates. We calculate marginal effects from a negative binomial model and find that time off from school is associated with significantly fewer juvenile assault and drug-related arrests, although there are no changes in other types of crimes, such as burglaries. These results differ by region of the island and by average household incomes.
    Keywords: Education, Crime, Inequality
    JEL: J08 I24
    Date: 2013–08
  3. By: Albæk, Karsten (SFI - Danish National Centre for Social Research); Leth-Petersen, Søren (University of Copenhagen); le Maire, Daniel (University of Copenhagen); Tranæs, Torben (Rockwool Foundation Research Unit)
    Abstract: Draft lottery data combined with Danish longitudinal administrative records show that military service can reduce criminal activity for youth offenders who enter service at ages 19-22. For this group property crime is reduced for up to five years from the beginning of service, and the effect is therefore not only a result of incapacitation while enrolled. We find no effect of service on violent crimes. We also find no effect of military service on educational attainment and unemployment, but we find negative effects of service on earnings. These results suggest that military service does not upgrade productive human capital directly, but rather impacts criminal activity through other channels, for example by changing the attitudes to criminal activity for this group.
    Keywords: crime, military service, activation
    JEL: H56 K42 J24
    Date: 2013–07

This issue is ©2013 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.