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.     

Rage of Honor: Entente Indignation and the Lost Chance for Peace in the First World War

Why the First World War ended in 1918 and not earlier remains a major puzzle. We propose a new theory that emphasizes how honor prolongs wars beyond what rationalist theories can explain. It argues that when honor is insulted, an affronted actor will strive to punish the offender. Absent an apology, the pursuit of a satisfactory punishment leads the affronted belligerent to ignore unfavorable battlefield information, hold logically irreconcilable beliefs, process information in emotional terms, and obsess over status. We predict that wars of prevention and territorial occupation are most likely to elicit honor considerations. We test our argument against an obscure episode in the war where Germany and the United States made peace overtures in December 1916. We demonstrate that honor concerns made Entente decision makers see German aggression as an affront to their honor that only the destruction of Germany's political regime could redress.