Unemployment and Crime: Toward Resolving the Paradox

While official crime statistics from many countries show that unemployed people have high crime rates and that communities with a lot of unemployment experience a lot of crime, this cross-sectional relationship is very often not found in time-series studies of unemployment and crime. In Australia there have been no individual-level or cross-sectional studies of unemployment and adult crime which have failed to find a positive relationship and no time-series which have supported a positive relationship. Consistent with this pattern, a time series of homicide from 1921 to 1987 in Australia reveals no significant unemployment effect. A theoretical resolution of this apparent paradox is advanced in terms of the effect of female employment on crime in a partriarchal society. Crime is posited as a function of both total unemployment and female employment. When female employment is added to the model, it has a strong positive effect on homicide, and unemployment also assumes a strong positive effect.     

Unemployment and crime: the role of apprehension

An increase in the unemployment rate decreases the opportunity cost of crime and increases the crime rate according to standard microeconomics models. However, a large body of empirical research has shown that an increase in unemployment may increase or decrease crime. By incorporating the return to crime into standard economic models, this paper shows that an increase in unemployment, as in recessions, decreases the opportunity cost of crime and the return to crime as well. As a result, the effect of unemployment on crime is ambiguous and depends on the apprehension rate. An increase in the unemployment rate tends to decrease the crime rate at lower apprehension rates, but to increase it at higher apprehension rates. An increase in the generosity of unemployment insurance benefits does not necessarily reduce the crime rate, and the effect of more generous unemployment insurance on crime depends again on the apprehension rate.     

UNEMPLOYMENT,CRIME, AND IMPRISONMENT: A PANEL APPROACH*

Despite the widespreach acceptance of the notion that during periods of economic downturn, higher levels of unemployment lead to higher levels of crime and imprisonment, the research literature reveals very little consistent support for the existence of such a relationship. Studies that do suggest unemployment causes crime and imprisonment have used methodological techniques which, especially in over-time studies, could lead to the acceptance of spurious effects caused by trend and lag as evidence of a true relationship. Using data over a six-year period for the United States, a panel model is specified in which appropriate controls for intra-series trend and cross-series lagged effects are included. Although bivariate correlations are strongly suggestive of a relationship between unemployment and crime, results of the panel approach suggest that most of the apparent relationship is due to common trend effects. Little evidence is found for the existence of a relationship between crime/imprisonment and unemployment, regardless of the type of effect considered. In addition, results from stability tests indicate that the crime-unemployment relationship has been unstable. while the unemployment-imprisonment relationship has been relatively invariant.     

“Last Hired,First Fired”: The Effect of the Unemployment Rate on the Probability of Repeat Offending

Research examining the connection between the unemployment rate and the aggregate crime is inconclusive. One explanation for the inconsistent findings is that the unemployment rate influences the criminal activity of repeat and first-time offenders in different ways. Results support this thesis by revealing an inverted U-shaped association between the unemployment rate and the probability of repeat offending. The curvilinear relationship likely results from repeat offenders and those lacking a criminal record entering and exiting the labor force at different levels of unemployment. Our findings highlight the role that the unemployment rate plays in affecting repeat offending and underscore the importance of distinguishing between repeat and first-time offending when analyzing the effect of the unemployment rate on crime.     

Unemployment,Guardianship, and Weekday Residential Burglary

The absence of a consistent positive effect of the unemployment rate on the crime rate is perplexing, but it may be partly due to the countervailing effect of guardianship. Using weekly state-level data and a pooled cross-sectional time-series research design, we investigate whether the unemployment rate influences residential burglary. This study contributes to the extant literature by distinguishing between weekday residential burglaries, or those burglaries that occur between the hours of 6 am to 6 pm on weekdays, from weeknight/weekend burglaries. If unemployment increases guardianship because previously employed individuals are now at home during the workday protecting their possessions, the expectation is that the unemployment rate will have an instantaneous negative effect on residential burglaries that transpire during normal working hours. Results buttress the logic associated with the guardianship thesis in that a rise in the unemployment rate only engenders a decrease in weekday residential burglaries.     

Establishing the statistical relationship between population size and UCR crime rate: Its impact and implications

The fact that the volume of crime is related to the size of a jurisdiction's population has been well established. The relationship between crime rate and population size, however, is less clear. Crime rate presents crime on a per capita basis, and is intended to adjust for population size so that comparisons can be made. In this article, the author first establishes the statistical relationship between crime rate and population size. Once established, he conducted an analysis of crime rates in jurisdictions of various sizes and in a variety of population-based strata using data obtained from the Uniform Crime Reports (UCR). Based on his findings, the author discusses implications for research and analysis, database management, and making jurisdictional comparisons of crime rates.     

Unemployment,poverty and arrests in the Georgia black belt

Although Blacks have made economic progress since 1960, these gains have been overshadowed by soaring crime rates. The purpose of this paper is to examine the effects of unemployment and economic deprivation on Black arrests using data from 50 predominantly rural counties in Georgia where Blacks comprise 40 percent of the population. The study concludes that Black arrests in the 50 counties forming Georgia’s Black Belt may be linked to the economic and structural conditions associated with Black unemployment, economic deprivation, and the occupational segregation of Blacks to secondary, low-paying jobs. The findings lend plausibility to the notion that the low socioeconomic status of Blacks, coupled with their lack of access to the macrostructural opportunity system creates conditions favoring normative violations. The findings therefore furnish tentative support for opportunity-structure theory of crime that asserts that the lack of access to opportunity plays a salient role in understanding the causal nexus of Black involvement in crime.     

Is peniaphobia an incentive to crime?

This article analysed the relationship between crime categories and unemployment rates using a set of panel data for 14 states in Malaysia with data spanning from 1982 to 2008. It is well documented that crime and unemployment are negatively related in Malaysia; the same is the case for both violent and property crime. Increases in unemployment rates cause the consumption expenditure to decrease, especially among households, hence, causing potential earnings from illegitimate activities to drop and discouraging a person from committing a crime. However, the significant properties of the t-statistics indicate that it is important to consider the labour market conditions in employing appropriate policies in fighting crime. That being said, unemployment can indirectly explain hunger, poverty, decreasing standards of life and economic downturn.     

Prison commitments,crime, and unemployment: A theoretical and empirical specification for the United States, 1933–1985

This paper examines sources for the changing commitment rates to U.S. state prisons (PCR) from 1933 to 1985 using a variety of time-series techniques. Theoretically, it resolves ambiguous interpretations of how crime, unemployment, and imprisonment are related. Hypotheses that crime and punishment are in equilibrium are rejected. Our final specification supports theories integrating institutionally endogenous and socially exogenous causes of prison use and includes feedback effects between crime and punishment. We reached several general conclusions. (1) Changes in PCR are due partly to changes in the levels of unemployment, age composition of the population, and military active-duty rates. (2) Effects of the criminal justice system, captured as autoregressive institutional drift, account for approximately half of the year-to-year fluctuations in the PCR. The contemporaneous prison discharge rate also influences the rate of prison commitments. (3) Neither the specified nor the unspecified institutional effects mediate the effects of other exogenous variables. (4) Under most simultaneous-equation specifications, the crime rate is moderately influenced by the contemporaneous unemployment rate and strongly influenced by prior levels of prison commitments. The preferred simultaneous causal model estimates a modest positive coefficient for the unemployment-crime causal path and a substantial positive coefficient for the unemployment-prison commitment causal path.     

A contextual analysis of crime rates: The Korean case<Superscript>⋆</Superscript>

During recent attempts to understand crime in relation to its environments, studies have focused on a single aspect of either economic or organizational context. Furthermore, scant attention has been given to the independent role of the political influence on response to criminal activity. This study examines the relative roles of economic conditions, organizational constraints of police, and political climate in explaining changes in crime rates by incorporating these three contexts into a single study. By using a variety of official statistics, we conducted time-series analyses to examine the social context of crime over the past three decades in South Korea. Findings indicate, first, that the unemployment rate is the best predictor of changes in crime rates; it consistently increased the level of both property and violent crimes. Second, organizational capacity, as indicated by police per capita, is found not to have any consistent effect on crime rates. Third, the impact of political repression, measured by the presence of extraordinary laws and the number of political prisoners, also shows inconsistent effects on crime. However, crime rates were somewhat lower during the past three military regimes, which support the argument that authoritarian governments exercised more punitive sanctions to deter crimes. Implications are discussed and suggestions are offered for future research on this topic.This work was supported by Korean Research Foundation Grant (KRF-2004-003-BO0142). An earlier version of this paper was presented at the 2004 mettings of the American Society of Criminology. We would like to thank Ivan Sun for his insightful comments and helpful suggestions.     

Do Fringe Banks Create Fringe Neighborhoods? Examining the Spatial Relationship between Fringe Banking and Neighborhood Crime Rates

In the aftermath of one of the worst recessions in US history, high unemployment has placed millions of Americans in precarious financial positions. More than ever, Americans are opting out of traditional financial services, relying instead on “fringe lenders” such as check cashers, payday lenders, and pawnshops to manage their finances. Given their tremendous growth and the concern that consumers who are least able to pay for high-cost, high-risk financial products are most likely to use them, fringe lenders have been the subject of controversy and the focus of much research. Largely unknown, however, are the effects of fringe lenders on the communities where they are located. Given their spatial concentration in low-income neighborhoods with greater concentrations of racial and ethnic minorities—areas with typically more crime—of concern is whether fringe lenders themselves are criminogenic. We consider this by examining the impact of several types of fringe lenders on neighborhood crime rates in Los Angeles. Our findings reveal that the presence of fringe banks on a block is related to higher crime levels, even after controlling for a range of factors known to be associated with crime rates. The presence of a fringe bank also impacts crime, particularly robbery, on adjacent blocks. Whereas we find that pawnshops have little impact on crime levels, payday lenders and check cashers have a much stronger impact. Finally, we discover there are moderating effects, as the fringe lender–crime relationship is considerably reduced if the lender is located in a higher population density area.     

Unemployment and the dynamics of offender populations

This paper models the increase in the participation rate of criminal behavior as either the initiation rate or the career length of criminals changes in response to increases in unemployment. Even with large instantaneous increases in unemployment, the models show a very slow increase in the criminal participation rate, giving a possible explanation of the failure of many studies to demonstrate a link between unemployment and crime levels.     

The economy,crime and time: An analysis of recorded property crime in England & Wales 1961–2006

We seek to determine whether one of the unanticipated side-effects of social and economic changes associated with the adoption of neoliberal and monetarist economics during the 1970s/1980s was rising crime rates. Undertaking time series analysis of social and economic determinants of property crime (using official statistics on recorded crime for England and Wales from 1961 to 2006) we develop a model of the effect of changes in socio-economic variables (unemployment, inequality, welfare spending and incarceration) on property crime rates. We find that while three of these had significant effects on change in the property crime rate, income inequality did not. We conclude with a discussion of the extent to which neoliberal economic and welfare (and later criminal justice) policies can be held to have influenced the property crime rate since the early 1980s and what this tells us about the social and economic determinants of crime at the macro-level.     

CRIMINAL BEHAVIOR AND THE GAINS FROM CRIME

A number of economists recently have applied tools of economics to analysis of crime. The resulting models of criminal activity typically postulate that crime is positively related to gains porn crime and inversely related to the probability of punishment. While empirical studies have confirmed this latter effect, the relation between gains from crime and criminal activity has not been satisfactorily examined. This paper specifically tests the empirical relation between criminal behavior and the gains from crime. The unsettling possibility that decreases in the gains from crime my lead to increases in the number of crimes is discussed.     

Testing Theory and the Analysis of Time Series Data

Although the relationship between unemployment and crime has been a longstanding interest in criminology, there is little agreement about appropriate models for analyzing this relationship. David Greenberg's (this issue) discussion highlights two issues that raise questions about recent research on the unemployment–crime relationship. First, he extends the work of Hale and Sabbagh (1991) and argues that cointegration methods should be used instead of first-differenced regression models to analyze unemployment and crime time series data. Second, he argues that previous attempts to test his strain theory linking unemployment to the age distribution of crime rely on flawed hypotheses, inappropriate data, and faulty measurement. In this paper, I address both of Greenberg's claims. I begin with a discussion of the relative utility of cointegration analysis and of first-differenced regression models for the analysis of the unemployment–crime relationship, focusing on the link between theory and statistical model. I then discuss the possibility of ever testing and falsifying Greenberg's strain theory.     

SPREADING THE WEALTH: THE EFFECT OF THE DISTRIBUTION OF INCOME AND RACE/ETHNICITY ACROSS HOUSEHOLDS AND NEIGHBORHOODS ON CITY CRIME TRAJECTORIES*

This study tests the effect of the composition and distribution of economic resources and race/ethnicity in cities, as well as how they are geographically distributed within these cities, on crime rates during a 30‐year period. Using data on 352 cities from 1970 to 2000 in metropolitan areas that experienced a large growth in population after World War II, this study theorizes that the effect of racial/ethnic or economic segregation on crime is stronger in cities in which race/ethnicity or income are more salient (because of greater heterogeneity or inequality). We test and find that higher levels of segregation in cities with high levels of racial/ethnic heterogeneity lead to particularly high overall levels of the types of crime studied here (aggravated assaults, robberies, burglaries, and motor vehicle thefts). Similarly, higher levels of economic segregation lead to much higher levels of crime in cities with higher levels of inequality.     

Cross-national comparison of homicide: Age/sex-adjusted rates using the 1980 U.S. homicide experience as a standard

Cross-sectional studies of crime have typically relied on crude crime rates when making comparisons between countries. Crude rates control for population size but implicitly assume that all members of the population are equally at risk. Empirical studies have shown that, cross-nationally, risk varies by age and sex. Standardization of crime rates removes the confounding effects of variable age and sex population distributions. Since age/sex-specific crime rates are generally unavailable for many countries, the method of indirect standardization is the most desirable technique. Age/sex-adjusted homicide rates for 76 countries are presented, and two comparative measures are suggested. It is shown that while the United States has a higher homicide rate than all but 15 countries; in most cases, the magnitude of the difference, not controlling for age/sex differences, is overestimated. Crude rates underestimate differences between the United States and countries with higher rates of homicide.     

Crime,unemployment, and social structures of accumulation: An inquiry into historical contingency

This article examines whether prior inconsistency in findings about the impact of unemployment on crime is the result of historical contingency caused by changes in the social structures of accumulation (SSAs) associated with the development of twentieth-century U.S. capitalism. We explore this question by comparing the relationship between official measures of unemployment and the crimes of burglary, robbery, assault, and homicide during four phases of recent U.S. economic development identified by SSA theorists: economic exploration from 1933 to 1947, economic consolidation from 1948 to 1966, economic decay from 1967 to 1979, and a new period of exploration from 1980 to 1992. We propose that the unemployment-crime (U-C) relationship is shaped not merely by the fact of unemployment, but rather by its social meaning within developmental stages of social structures of accumulation. Time-series analysis of the U-C relationship within each SSA stage from 1933 to 1992 supports our hypothesis that periods of structural unemployment will be characterized by a stronger U-C relationship than those in which unemployment is primarily frictional. We then validate the periodization of shifts in the U-C relationship suggested by SSA theory by applying time-varying parameter analysis to the entire series from 1933 to 1992. On the basis of these findings we conclude that crime control policies and future research into the relationship between unemployment and crime should take into consideration the historically contingent nature of the U-C relationship.     

EXAMINING THE GENERALITY OF THE UNEMPLOYMENT–CRIME ASSOCIATION

This article examines whether the relationship between unemployment and criminal offending depends on the type of crime analyzed. We rely on fixed‐effects regression models to assess the association between changes in unemployment status and changes in violent crime, property crime, and driving under the influence (DUI) over a 6‐year period. We also examine whether the type of unemployment benefit received moderates the link to criminal behavior. We find significantly positive effects of unemployment on property crime but not on other types of crime. Our estimates also suggest that unemployed young males commit less crime while participating in active labor market programs when compared with periods during which they receive standard unemployment benefits.     

UNEMPLOYMENT AND PROPERTY CRIME: A TARGET‐SPECIFIC ASSESSMENT OF OPPORTUNITY AND MOTIVATION AS MEDIATING FACTORS*

Most recent unemployment‐crime (U‐C) research is informed by the possibility that unemployment could both increase motivation for crime and decrease criminal opportunities. The mediating links of motivation and opportunity, though often assumed, have almost never been measured. We directly test for the potential mediating effects of opportunity and motivation using county‐level data for target‐specific crime rates such as convenience store robberies, motorcycle thefts, etc. We link these with data on the supply and value of corresponding crime targets (e.g., number and annual sales of convenience stores). Opportunity levels were generally unrelated to property crime rates and do not appear to mediate the U‐C relationship.