IDEAS home Printed from https://ideas.repec.org/a/spr/joerap/v1y2018i2d10.1007_s41996-018-0014-8.html
   My bibliography  Save this article

The Short-Run Effects of the Great Recession on Crime

Author

Listed:
  • Pallab Kumar Ghosh

    (University of Oklahoma)

Abstract

The Great Recession had the most severe impacts on the unemployment rates of the racial and ethnic minorities as well as less-educated young men. There were cross-sectional variations of these disproportionate adverse impacts. This study exploits the changes in regional variations of the unemployment rates of unskilled men before and after the Great Recession to explain the sharp fall in aggregate crime rates in the post-recession recovery period. Our 2SLS approach uses plausible exogenous sources of changes in the state employment growth of minimum wage workers induced by the national employment growth of minimum wage workers. We find that changes in regional variations of the unemployment rates of unskilled young men can explain approximately 25% of the fall in the aggregate crime rate in the post-recession expansionary period. Estimating the heterogeneous impacts of unskilled young men by race, we find that the fall in aggregate crime rate was mainly driven by the changes in the unemployment rates of young black men.

Suggested Citation

  • Pallab Kumar Ghosh, 2018. "The Short-Run Effects of the Great Recession on Crime," Journal of Economics, Race, and Policy, Springer, vol. 1(2), pages 92-111, September.
    • Handle: RePEc:spr:joerap:v:1:y:2018:i:2:d:10.1007_s41996-018-0014-8
    DOI: 10.1007/s41996-018-0014-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41996-018-0014-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s41996-018-0014-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. W. Kip Viscusi, 1986. "Market Incentives for Criminal Behavior," NBER Chapters, in: The Black Youth Employment Crisis, pages 301-351, National Bureau of Economic Research, Inc.
    2. Jesse Rothstein, 2011. "Unemployment Insurance and Job Search in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 143-213.
    3. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    4. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    5. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
    6. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    7. Farber, Henry S, 2011. "Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010," IZA Discussion Papers 5696, Institute of Labor Economics (IZA).
    8. repec:pri:indrel:dsp01kw52j8087 is not listed on IDEAS
    9. Holzer, Harry J., 2007. "Collateral Costs: The Effects of Incarceration on the Employment and Earnings of Young Workers," IZA Discussion Papers 3118, Institute of Labor Economics (IZA).
    10. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historial Perspective from the Displaced Workers Survey, 1984-2010," Working Papers 1309, Princeton University, Department of Economics, Industrial Relations Section..
    11. Ming-Jen Lin, 2008. "Does Unemployment Increase Crime?: Evidence from U.S. Data 1974–2000," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 413-436.
    12. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010," NBER Working Papers 17040, National Bureau of Economic Research, Inc.
    13. Richard Freeman, 1987. "The relation of criminal activity to black youth employment," The Review of Black Political Economy, Springer;National Economic Association, vol. 16(1), pages 99-107, June.
    14. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    15. Topel, Robert, 1993. "What Have We Learned from Empirical Studies of Unemployment and Turnover?," American Economic Review, American Economic Association, vol. 83(2), pages 110-115, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Altindag, Duha T., 2012. "Crime and unemployment: Evidence from Europe," International Review of Law and Economics, Elsevier, vol. 32(1), pages 145-157.
    2. Povilas Lastauskas & Eirini Tatsi, 2013. "Spatial Nexus in Crime and unemployment in Times of crisis: Evidence from Germany," Cambridge Working Papers in Economics 1359, Faculty of Economics, University of Cambridge.
    3. Dickens William T. & Triest Robert K., 2012. "Potential Effects of the Great Recession on the U.S. Labor Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(3), pages 1-41, October.
    4. Alexandra Tsvetkova & Mark Partridge & Michael Betz, 2017. "Entrepreneurial and Employment Responses to Economic Conditions across the Rural-Urban Continuum," The ANNALS of the American Academy of Political and Social Science, , vol. 672(1), pages 83-102, July.
    5. Deiana, C, 2016. "Local Labour Market Effects of Unemployment on Crime Induced by Trade Shocks," Economics Discussion Papers 16529, University of Essex, Department of Economics.
    6. Tsvetkova, Alexandra & Partridge, Mark & Betz, Micael, 2016. "Entrepreneurial and Wage and Salary Employment Response to Economic Conditions Across the Rural-Urban Continuum," MPRA Paper 75781, University Library of Munich, Germany.
    7. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.
    8. Yu Liu & Thomas M. Fullerton Jr. & Nathan J. Ashby, 2013. "Assessing The Impacts Of Labor Market And Deterrence Variables On Crime Rates In Mexico," Contemporary Economic Policy, Western Economic Association International, vol. 31(4), pages 669-690, October.
    9. Lastauskas, Povilas & Tatsi, Eirini, 2017. "Spatial Nexus in Crime and Unemployment in Times of Crisis," Working Paper Series 2/2017, Stockholm University, Swedish Institute for Social Research.
    10. Till von Wachter, 2020. "The Persistent Effects of Initial Labor Market Conditions for Young Adults and Their Sources," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 168-194, Fall.
    11. Steven D. Mullins, 2012. "The Unemployment Impact of the 2008 Extension of Unemployment Insurance: As High as Robert Barro Suggested?," Econ Journal Watch, Econ Journal Watch, vol. 9(1), pages 3-20, January.
    12. Jon D. Wisman & Aaron Pacitti, 2013. "Ending the Crisis With Guaranteed Employment and Retraining," Working Papers 2013-12, American University, Department of Economics.
    13. Rafael Dix-Carneiro & Rodrigo R. Soares & Gabriel Ulyssea, 2018. "Economic Shocks and Crime: Evidence from the Brazilian Trade Liberalization," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 158-195, October.
    14. William T. Dickens & Robert K. Triest, 2012. "Potential effects of the Great Recession on the U.S. labor market," Working Papers 12-9, Federal Reserve Bank of Boston.
    15. Pallab K. Ghosh & Gary A. Hoover & Zexuan Liu, 2020. "Do State Minimum Wages Affect the Incarceration Rate?," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 845-872, January.
    16. Gabriel P. Mathy, 2015. "Hysteresis and Persistent Long-Term Unemployment: Lessons from the Great Depression and World War II," Working Papers 2015-02, American University, Department of Economics.
    17. Sieger, Philip, 2013. "Job Losses and Criminal Gains: Analyzing the Effect of Unemployment on Criminal Activity," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79929, Verein für Socialpolitik / German Economic Association.
    18. Bohacek, Radim & Myck, Michal, 2017. "Economic Consequences of Political Persecution," IZA Discussion Papers 11136, Institute of Labor Economics (IZA).
    19. Jessamyn Schaller & Mariana Zerpa, 2019. "Short-Run Effects of Parental Job Loss on Child Health," American Journal of Health Economics, MIT Press, vol. 5(1), pages 8-41, Winter.
    20. Alejandro Gaviria & Carlos Medina & Jorge Tamayo, 2010. "Assessing the Link between Adolescent Fertility and Urban Crime," Borradores de Economia 6860, Banco de la Republica.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joerap:v:1:y:2018:i:2:d:10.1007_s41996-018-0014-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.