Title: “Do Financial Misconduct Experiences Spur White-Collar Crime?”: A Danish Study Reveals the Impact of Personal Experiences

Background

A study conducted by researchers Steffen Andersen, Tobin Hanspal, and Kasper Meisner Nielsen
Focused on individuals in Denmark, known for its low crime rates
Conducted after the financial crisis of 2007 saw a significant increase in white-collar crime cases

Individuals with personal experiences of financial misconduct are more likely to commit white-collar crimes, compared to similar individuals with no such experiences
The increase in white-collar crimes was largely due to individuals with no prior criminal records
Over half of the identified new convictions resulted in prison sentencing, a significant statistic given the rarity of imprisonment for white-collar crimes in Denmark

Researchers analyzed data from Danish police records and mapped Danish criminal codes into FBI definitions of crime
Individuals who had experienced financial misconduct were two to three times more likely to be convicted of white-collar crimes

Performed a powerful difference-in-differences test
Compared the probability of conviction for investors in banks which defaulted and were charged criminally with financial misconduct, with investors of non-criminally charged banks which also defaulted during the crisis
findings suggest that personally experiencing misconduct may have played a role in altering individuals’ moral compasses and making them more likely to engage in fraudulent activities

White-collar crimes are becoming increasingly common
Understanding the mechanisms behind these crimes could lead to implementation of effective prevention strategies and interventions
Mitigating the negative impact of financial misconduct on individuals and society at large.