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Unemployment and crime: an empirical investigation

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  • Daniel Lee
  • Stephen Holoviak

Abstract

This paper examines the relationship between labour market conditions and various crime series in three Asia-Pacific countries: Australia, Japan and South Korea. Johansen's maximum likelihood cointegration tests are applied to annual, aggregate data to see whether there exists a long-run equilibrium relationship between unemployment and crime variables. In a society with a high unemployment rate, especially among young males, the opportunity cost of crime is relatively low so that criminal activities tend to increase. Although theoretically well-formulated, previous empirical studies of this hypothesis have yielded mixed evidence. The results of this study, however, appear to provide strong support for a long-run equilibrium relationship between unemployment and several crime series. This may be due to the use of cointegration method in the study, which is quite common in the area of economics and finance, but has not been applied extensively to the study of crime. Empirical support seems to be even stronger for the relationship between unemployment among young males and crime.

Suggested Citation

  • Daniel Lee & Stephen Holoviak, 2006. "Unemployment and crime: an empirical investigation," Applied Economics Letters, Taylor & Francis Journals, vol. 13(12), pages 805-810.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:12:p:805-810
    DOI: 10.1080/13504850500425105
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    References listed on IDEAS

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    Cited by:

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    2. Vinoj Abraham, 2012. "The Deteriorating Labour Market Conditions and Crime: An Analysis of Indian States during 2001-2008," Millennial Asia, , vol. 3(2), pages 207-231, July.
    3. Thomas A. Garrett & Lesli S. Ott, 2008. "City business cycles and crime," Working Papers 2008-026, Federal Reserve Bank of St. Louis.
    4. Siwach, Garima, 2018. "Unemployment shocks for individuals on the margin: Exploring recidivism effects," Labour Economics, Elsevier, vol. 52(C), pages 231-244.
    5. Ferda Halicioglu, 2012. "Temporal causality and the dynamics of crime in Turkey," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(9), pages 704-720, July.
    6. Sarah A. Frederick & James J. Jozefowicz & Zackary T. Nelson, 2016. "A dynamic panel data study of the unemployment-crime relationship: the case of Pennsylvania," Economics Bulletin, AccessEcon, vol. 36(3), pages 1497-1507.
    7. Chletsos, Michael & Sintos, Andreas, 2023. "The effects of IMF conditional programs on the unemployment rate," European Journal of Political Economy, Elsevier, vol. 76(C).
    8. Cotte Poveda Alexander, 2011. "Socio-Economic Development and Violence: An Empirical Application for Seven Metropolitan Areas in Colombia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 17(1), pages 1-23, September.
    9. Mohamad Kassem & Amjad Ali & Marc Audi, 2019. "Unemployment Rate, Population Density and Crime Rate in Punjab (Pakistan): An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(2), pages 92-104, June.
    10. Tauã Vital & Daniel Morais De Souza & Jessica Faciroli, 2020. "Unemployment, poverty and police performance: an ARDL analysis of crime in São Paulo," Economics Bulletin, AccessEcon, vol. 40(1), pages 128-139.
    11. Kabeya Clement Mulamba, 2021. "A Spatial Analysis of Property Crime Rates in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 89(3), pages 329-347, September.
    12. Halicioglu, Ferda & Andrés, Antonio R. & Yamamura, Eiji, 2012. "Modeling crime in Japan," Economic Modelling, Elsevier, vol. 29(5), pages 1640-1645.
    13. Dmitry Burakov, 2019. "Oil Hikes, Drugs and Bribes: Do Oil Prices Matter for Crime Rate in Russia?," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 84-94.
    14. Sediq Sameem & Kevin Sylwester, 2016. "Unemployment and Homicides: Evidence from Individual Level U.S. Data," Economics Bulletin, AccessEcon, vol. 36(3), pages 1295-1305.

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