This study investigates the potential causal relationship between the assignment of financial restitution penalties to juvenile offenders and subsequent recidivism, defined as being sentenced for a new offense within the next two years. Although the use of financial penalties on juveniles is prevalent, there is limited research on its potential link to reoffending. Using a dataset of all juvenile offenders in the state of Pennsylvania from 2015 to 2017 (n = 15,382), we implement a propensity-score matching model to estimate the effects of restitution assignment on future recidivism and test for endogeneity between the two using a control function model. Controlling for offender demographics, criminal history, and offense type and severity, we estimate that restitution assignment increases recidivism rates by 26-percentage points (p < 0.001) and do not find statistical evidence of endogeneity. Higher rates of recidivism are found for those assigned restitution across all offense grades, categories, and dispositions.
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