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Can Jobs Reduce Crime? Evidence from a Minimum Wage Policy in South Korea

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  • Hoyong Jung
  • Seungwoo Chin

Abstract

This study examines the effect of employment on crime in South Korea. The sharp 16 percent increase in the minimum wage in 2018 significantly affected low-income workers, particularly the young and elderly. Using the interaction between annual minimum wage changes and age groups vulnerable to such changes within local districts as an instrumental variable for employment, the analysis identifies the impact of employment on crime rates. The results show that improved employment conditions lead to lower crime rates: a 1 percent increase in employment reduces crime occurrences per 1,000 people by 0.77, equivalent to a 2.5 percent decline relative to the mean. The reduction in arrests is smaller, as a 1 percent rise in employment lowers arrests per 1,000 people by 0.46, or 1.8 percent of the mean. This gap suggests that when employment worsens, public anxiety about crime may rise, as arrests do not decline as rapidly as crime incidents. Effects differ by crime type, with employment improvements significantly decreasing felonies, minor violence, and property crimes, while increasing intellectual crimes.

Suggested Citation

  • Hoyong Jung & Seungwoo Chin, 2026. "Can Jobs Reduce Crime? Evidence from a Minimum Wage Policy in South Korea," International Economic Journal, Taylor & Francis Journals, vol. 40(1), pages 114-134, January.
    • Handle: RePEc:taf:intecj:v:40:y:2026:i:1:p:114-134
    DOI: 10.1080/10168737.2025.2584133
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