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Unemployment and crime: the role of apprehension

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  • Kangoh Lee

    (San Diego State University)

Abstract

An increase in the unemployment rate decreases the opportunity cost of crime and increases the crime rate according to standard microeconomics models. However, a large body of empirical research has shown that an increase in unemployment may increase or decrease crime. By incorporating the return to crime into standard economic models, this paper shows that an increase in unemployment, as in recessions, decreases the opportunity cost of crime and the return to crime as well. As a result, the effect of unemployment on crime is ambiguous and depends on the apprehension rate. An increase in the unemployment rate tends to decrease the crime rate at lower apprehension rates, but to increase it at higher apprehension rates. An increase in the generosity of unemployment insurance benefits does not necessarily reduce the crime rate, and the effect of more generous unemployment insurance on crime depends again on the apprehension rate.

Suggested Citation

  • Kangoh Lee, 2018. "Unemployment and crime: the role of apprehension," European Journal of Law and Economics, Springer, vol. 45(1), pages 59-80, February.
  • Handle: RePEc:kap:ejlwec:v:45:y:2018:i:1:d:10.1007_s10657-016-9526-3
    DOI: 10.1007/s10657-016-9526-3
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    More about this item

    Keywords

    Unemployment; Crime; Apprehension;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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