A Policy Evaluation of Non-custodial Sentencing for First-time Offenders: Evidence From New Zealand

The economic theory of crime posits that crime rates will decrease if the expected costs of crime exceed the expected benefits. The expected costs of crime are positively correlated with the probability of apprehension and the punishment if caught. This paper tests the effect of non-custodial punishments on recidivism by exploiting a large-scale sentencing reform in New Zealand. Regression discontinuity design estimates suggest that, relative to short-term imprisonment, receiving a non-custodial sentence after the 1 October 2007 policy significantly increases first-time offenders’ recidivism rate by 8.7% after one year, 9.5% after two years, and 9.6% after five years. However, these effects largely stem from serious breaches of non-custodial sentence conditions, highlighting that administrative non-compliance, rather than substantive new criminal activity, is the primary driver of the increased recidivism.