Crime, Prison, and Female Labor Supply

This paper introduces the vector autoregressive (VAR) methodology into themainstream of applied criminological research as an alternative to theestimation of structural models of crime. The paper presents cointegrationtest statistics for a second-order VAR of crime, prison population, femalelabor force participation, and durable consumption. Our results for theimpact of imprisonment on the crime rate are similar to Levitt's (1996)and substantially larger than previous estimates (e.g., Marvell and Moody,1994). We find that the short-run response of the crime rate to increasedlabor force participation of women is larger than the long-run effect. Theimplication is that major social changes, like the increased labor supply ofwomen, may have surprising impacts and that social institutions may takesome substantial period of time to adjust to such major changes.