Finding a Way Out of the Weeds : The effect legalization of recreational marijuana has on unemployment and arrests – are there any racial disparities?

University essay from Uppsala universitet/Nationalekonomiska institutionen

Abstract: The United States has long waged war against drugs resulting in, amongst other things, theworld’s largest prison population and costing society billions of dollars yearly. As a possible solution to the problem, legalization of recreational marijuana has emerged with Colorado as a pioneering state. The purpose of this study is to examine whether legalization has a casual effect on unemployment and arrests. This was done by performing difference-in-difference estimations with Colorado as the treatment group, Georgia and Arizona as the control group with unemployment and varying offenses as dependent variables. The results indicate legalization leading to a decrease in marijuana possession arrests. However, the non-drug related offenses and unemployment increased, albeit without statistical significance, which means that the null hypothesis cannot be rejected and leaves room for questioning of the results. This may be explained by there being more factors affecting those variables, Thus, using legalization as a mean to decrease unemployment and arrest rates can be challenged.

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