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Unemployment and Crime: New Answers to an Old Question

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Author Info

  • Papps, Kerry L.

    ()
    (University of Bath)

  • Winkelmann, Rainer

    ()
    (University of Zurich)

Abstract

This paper uses panel data techniques to examine the relationship between unemployment and a range of categories of crime in New Zealand. The data cover sixteen regions over the period 1984 to 1996. Random and fixed effects models are used to investigate the possibility of a causal relationship between unemployment and crime. Hypothesis tests show that the inclusion of random region effects and fixed time effects produces the most efficient model. The main finding of the paper is that unemployment cannot explain changes in the overall crime rate, although significant effects on crime are found for some subcategories of crime.

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File URL: http://ftp.iza.org/dp25.pdf
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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 25.

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Length: 29 pages
Date of creation: Nov 1998
Date of revision:
Publication status: published in: New Zealand Economic Papers, 2000, 34 (2), 53-72
Handle: RePEc:iza:izadps:dp25

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Keywords: clearance rate; regional panel data; fixed effects;

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References

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  1. George J. Stigler, 1974. "The Optimum Enforcement of Laws," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 55-67 National Bureau of Economic Research, Inc.
  2. Grogger, Jeffrey, 1995. "The Effect of Arrests on the Employment and Earnings of Young Men," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 51-71, February.
  3. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  4. Meyers, Samuel L, Jr, 1983. "Estimating the Economic Model of Crime: Employment versus Punishment Effects," The Quarterly Journal of Economics, MIT Press, vol. 98(1), pages 157-66, February.
  5. Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
  6. 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.
  7. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
  8. Tauchen, Helen & Witte, Ann Dryden & Griesinger, Harriet, 1994. "Criminal Deterrence: Revisiting the Issue with a Birth Cohort," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 399-412, August.
  9. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
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Citations

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Cited by:
  1. Raphael, Steven & Winter-Ebmer, Rudolf, 1999. "Identifying the Effect of Unemployment on Crime," CEPR Discussion Papers 2129, C.E.P.R. Discussion Papers.
  2. Paolo Buonanno, 2005. "Crime and labour market opportunities in Italy (1993-2002)," Working Papers 0504, University of Bergamo, Department of Economics.
  3. Suncica Vujic & Siem Jan Koopman & Jacques J. F. Commandeur, 2012. "Economic Trends and Cycles in Crime: A Study for England and Wales," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 232(6), pages 652-677, November.
  4. Fougère, Denis & Kramarz, Francis & Pouget, Julien, 2006. "Youth Unemployment and Crime in France," CEPR Discussion Papers 5600, C.E.P.R. Discussion Papers.
  5. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ayse, 2014. "Is crime in Turkey economically rational?," Discussion Papers of Business and Economics 3/2014, Department of Business and Economics, University of Southern Denmark.
  6. Ian Pool & Sandra Baxendine & William Cochrane & James Lindop, 2006. "New Zealand Regions, 1986-2001: Dependency and Development of Social Capital," Population Studies Centre Discussion Papers dp-62, University of Waikato, Population Studies Centre.
  7. Halicioglu, Ferda & Andrés, Antonio R. & Yamamura, Eiji, 2012. "Modeling crime in Japan," Economic Modelling, Elsevier, vol. 29(5), pages 1640-1645.
  8. Jorgen Lauridsen, 2009. "Is Baltic Crime Economically Rational?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(1), pages 31-38, July.
  9. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2006. "Crime Distribution and Victim Behavior during a Crime Wave," CEDLAS, Working Papers 0044, CEDLAS, Universidad Nacional de La Plata.
  10. Nikolaos Dritsakis & Alexandros Gkanas, 2009. "The effect of socio-economic determinants on crime rates: An empirical research in the case of Greece with cointegration analysis," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 2(2), pages 51-64, December.
  11. Edmark, Karin, 2003. "The Effects of Unemployment on Property Crime: Evidence from a Period of Unusually Large Swings in the Business Cycle," Working Paper Series 2003:14, Uppsala University, Department of Economics.
  12. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2006. "Crime Distribution & Victim Behavior During a Crime Wave," William Davidson Institute Working Papers Series wp849, William Davidson Institute at the University of Michigan.
  13. Lauridsen, Jorgen, 2010. "Is Polish Crime Economically Rational?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(2).
  14. Syed Yasir Mahmood Gillani & Rana Ejaz Ali Khan & Abid Rashid Gill, 2011. "Unemployment and Property Crimes in Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 124-133, September.

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