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Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997

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Author Info
Eric D. Gould
Bruce A. Weinberg
David B. Mustard

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Abstract

The labor market prospects of young, unskilled men fell dramatically in the 1980s and improved in the 1990s. Crime rates show a reverse pattern: increasing during the 1980s and falling in the 1990s. Because young, unskilled men commit most crime, this paper seeks to establish a causal relationship between the two trends. Previous work on the relationship between labor markets and crime focused mainly on the relationship between the unemployment rate and crime, and found inconclusive results. In contrast, this paper examines the impact of both wages and unemployment on crime, and uses instrumental variables to establish causality. We conclude that both wages and unemployment are significantly related to crime, but that wages played a larger role in the crime trends over the last few decades. These results are robust to the inclusion of deterrence variables, controls for simultaneity, and controlling for individual and family characteristics. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 84 (2002)
Issue (Month): 1 (February)
Pages: 45-61
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Handle: RePEc:tpr:restat:v:84:y:2002:i:1:p:45-61

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ehrlich, Isaac, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter. [Downloadable!] (restricted)
  2. 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 270-90, June. [Downloadable!] (restricted)
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  3. Julie Berry Cullen & Steven D. Levitt, 1996. "Crime, Urban Flight, and the Consequences for Cities," NBER Working Papers 5737, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Steven D. Levitt, 1995. "Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?," NBER Working Papers 5268, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Freeman, Richard B, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter. [Downloadable!] (restricted)
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  6. DiIulio, John J, Jr, 1996. "Help Wanted: Economists, Crime and Public Policy," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 3-24, Winter. [Downloadable!] (restricted)
  7. Glaeser, Edward L & Sacerdote, Bruce & Scheinkman, Jose A, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 507-48, May. [Downloadable!] (restricted)
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  8. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June. [Downloadable!] (restricted)
  9. Richard B. Freeman, 1994. "Crime and the Job Market," NBER Working Papers 4910, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992-1), pages 1-76. [Downloadable!]
  11. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
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  12. Lott, John R, Jr, 1992. "An Attempt at Measuring the Total Monetary Penalty from Drug Convictions: The Importance of an Individual's Reputation," Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 159-87, January.
  13. Jeff Grogger, 1997. "Market Wages and Youth Crime," NBER Working Papers 5983, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February. [Downloadable!] (restricted)
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  15. Topel, Robert H & Ward, Michael P, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 439-79, May. [Downloadable!] (restricted)
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  16. Timothy J. Bartik, 2003. "Local Economic Development Policies," Staff Working Papers 03-91, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  17. Ehrlich, Isaac, 1981. "On the Usefulness of Controlling Individuals: An Economic Analysis of Rehabilitation, Incapacitation, and Deterrence," American Economic Review, American Economic Association, vol. 71(3), pages 307-22, June. [Downloadable!] (restricted)
  18. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December. [Downloadable!] (restricted)
  19. Edward L. Glaeser & Bruce Sacerdote, 1996. "Why is There More Crime in Cities?," Harvard Institute of Economic Research Working Papers 1746, Harvard - Institute of Economic Research.
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  20. Sah, Raaj K, 1991. "Social Osmosis and Patterns of Crime," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1272-95, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Thomas A. Garrett & Lesli S. Ott, 2008. "City business cycles and crime," Working Papers 2008-026, Federal Reserve Bank of St. Louis. [Downloadable!]
  2. Mari Rege, Torbjørn Skardhamar, Kjetil Telle and Mark Votruba, 2009. "The effect of plant closure on crime," Discussion Papers 593, Research Department of Statistics Norway. [Downloadable!]
  3. Steven D. Levitt & Lance Lochner, 2001. "The Determinants of Juvenile Crime," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 327-374 National Bureau of Economic Research, Inc. [Downloadable!]
  4. Carsten Ochsen, 2005. "Crime and European Labour Market Policy," Thuenen-Series of Applied Economic Theory 55, University of Rostock, Institute of Economics, Germany. [Downloadable!]
  5. Antonio Merlo & Kenneth I. Wolpin, 2008. "The Transition from School to Jail: Youth Crime and High School Completion Among Black Males, Second Version," PIER Working Paper Archive 09-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 16 Jan 2009. [Downloadable!]
  6. Chihiro Muroi & Robert Baumann, 2009. "The Non-Linear Effect of Wealth on Crime," Working Papers 0907, College of the Holy Cross, Department of Economics. [Downloadable!]
  7. Deller, Steven & Deller, Melissa, 2005. "Shifting Patterns in Wisconsin Crime Rates," Staff Paper Series 491, University of Wisconsin, Agricultural and Applied Economics. [Downloadable!]
  8. Matthew Baker & Niklas J. Westelius, 2009. "Crime, Expectations and The Deterrence Hypothesis," Hunter College Department of Economics Working Papers 425, Hunter College: Department of Economics. [Downloadable!]
  9. Demombynes, Gabriel & Ozler, Berk, 2002. "Crime and local inequality in South Africa," Policy Research Working Paper Series 2925, The World Bank. [Downloadable!]
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  10. Antonio Merlo & Kenneth I. Wolpin, 2008. "The Transition from School to Jail: Youth Crime and High School Completion Among Black Males," PIER Working Paper Archive 08-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  11. Antoni Calvo-armengol & Yves Zenou, 2003. "Does crime affect unemployment? The Role of social networks," Annales d'Economie et de Statistique, ADRES, issue 71-72, pages 07, Juillet-D. [Downloadable!]
  12. Entorf, Horst, 2008. "Crime and the Labour Market: Evidence from a Survey of Inmates," ZEW Discussion Papers 08-131, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
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