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The Effects of Wage and Unemployment on Crime Incentives – An Empirical Analysis of Total, Property and Violent Crimes

Author

Listed:
  • Paulo Augusto Pettenuzzo de Britto
  • Tatiana Alessio de Britto

Abstract

Using quarterly data of the U.S economy and based on cointegration analysis, we built a relatively simple error correction model focusing on a few key variables that can help prove that crime is an induced response to economic incentives. In particular, we found causality summing from unemployment and wage levels to total crime in the long-run, and causality from wage to total crime in the short-run. For property crime, we found the above relationships plus a short-run causality from unemployment. Finally, violent crime seems not to be explained by economic variables.

Suggested Citation

  • Paulo Augusto Pettenuzzo de Britto & Tatiana Alessio de Britto, 2014. "The Effects of Wage and Unemployment on Crime Incentives – An Empirical Analysis of Total, Property and Violent Crimes," Economics and Politics Working Paper Series 46/2014, Economics and Politics Research Group (EPRG), University of Brasília.
    • Handle: RePEc:gvn:eprgwp:462014
    DOI: 10.5281/zenodo.23601935
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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