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Criminality and Income Inequality in Indonesia

Author

Listed:
  • Lilik Sugiharti

    (Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia)

  • Miguel Angel Esquivias

    (Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia)

  • Mohd Shahidan Shaari

    (Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia
    Faculty of Applied and Human Sciences, Universiti Malaysia Perlis, Arau 02660, Malaysia)

  • Lussi Agustin

    (Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia)

  • Hilda Rohmawati

    (Faculty of Economics and Business, Airlangga University, Surabaya 60286, Indonesia
    Ministry of National Development Planning, Jakarta 10310, Indonesia)

Abstract

We investigate whether a nexus exists between income inequality and criminal activity in Indonesia. Additionally, we examine socioeconomic variables and potential links with criminal actions (i.e., crime rate, murder, rape, physical abuse, robbery, and fraud). We use the generalized method of moments (GMM) approach, employing data for 34 provinces in Indonesia over the period of 2010–2019. The results indicate that income inequality is associated with higher criminal activity. Overall, lower unemployment, larger investment (foreign and domestic), and higher human development (education and health) can help reduce crime in Indonesia. However, higher income can reduce physical abuse and crime rates, but theft and fraud increase with income growth. Rising unemployment increases rape, abuse, robbery, and fraud. Still, unemployment does not affect murder, suggesting that non-economic factors are dominant in explaining murder and violent crimes. Furthermore, income inequality can increase robbery and fraud, although it has no significant effects on murder, rape, and abuse. Government spending on social assistance and more efficient settlement of criminal acts can lower crime rates.

Suggested Citation

  • Lilik Sugiharti & Miguel Angel Esquivias & Mohd Shahidan Shaari & Lussi Agustin & Hilda Rohmawati, 2022. "Criminality and Income Inequality in Indonesia," Social Sciences, MDPI, vol. 11(3), pages 1-19, March.
    • Handle: RePEc:gam:jscscx:v:11:y:2022:i:3:p:142-:d:776270
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    References listed on IDEAS

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    2. Teng, Yuzhe, . "Does Wealth Decrease Victimization in Property Crime?: Evidence from Thailand," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 32(1).

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