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Crime, unemployment and labor market programs in turbulent times

Author

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  • Nilsson, Anna

    () (Stockholm University)

  • Agell, Jonas

    () (Stockholm University)

Abstract

We exploit the exceptional variation in municipality-level unemployment and spending on labor market programs in Sweden during the 1990s to identify the impact of unemployment and programs on crime. We identify a statistically significant effect of unemployment on the incidence of overall crime, burglary, auto-theft and drug possession. A calculation suggests that the sharp reduction in unemployment during the later 1990s may have reduced burglary and auto-theft with 15 and 20 percent, respectively. After addressing several specification issues, we conclude that there is at best weak evidence that labor market programs – general ones and those specifically targeted to the young – help to reduce crime.

Suggested Citation

  • Nilsson, Anna & Agell, Jonas, 2003. "Crime, unemployment and labor market programs in turbulent times," Working Paper Series 2003:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2003_014
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    References listed on IDEAS

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    1. Raphael, Steven & Winter-Ember, Rudolf, 2001. "Identifying the Effect of Unemployment on Crime," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 259-283, April.
    2. Dahlberg, Matz & Forslund, Anders, 1999. "Direct Displacement Effects of Labour Market Programmes: The Case of Sweden," Working Paper Series 1999:22, Uppsala University, Department of Economics.
    3. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    4. Alan B. Krueger & Jörn-Steffen Pischke, 1997. "A Statistical Analysis of Crime against Foreigners in Unified Germany," Journal of Human Resources, University of Wisconsin Press, vol. 32(1), pages 182-209.
    5. Lars Calmfors & Anders Forslund & Maria Hemström, 2002. "Does Active Labour Market Policy Work? Lessons from the Swedish Experiences," CESifo Working Paper Series 675, CESifo Group Munich.
    6. Lance Lochner & Enrico Moretti, 2004. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," American Economic Review, American Economic Association, vol. 94(1), pages 155-189, March.
    7. Richard B. Freeman, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter.
    8. Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
    9. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    10. Mirko Draca & Stephen Machin, 2015. "Crime and Economic Incentives," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 389-408, August.
    11. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
    12. Freeman, Richard B., 1999. "The economics of crime," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 52, pages 3529-3571 Elsevier.
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    Cited by:

    1. Peter Fallesen & Lars Pico Geerdsen & Susumu Imai & Torben Tranaes, 2010. "The Effect of Workfare Policy on Crime," Working Papers 1236, Queen's University, Department of Economics.
    2. Paolo Buonanno, 2006. "Crime and Labour Market Opportunities in Italy (1993-2002)," LABOUR, CEIS, vol. 20(4), pages 601-624, December.
    3. Matz Dahlberg & Magnus Gustavsson, 2008. "Inequality and Crime: Separating the Effects of Permanent and Transitory Income," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(2), pages 129-153, April.
    4. Vittorio, Daniele, 2009. "Organized crime and regional development. A review of the Italian case," MPRA Paper 16547, University Library of Munich, Germany.
    5. Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics.
    6. Marcus Dittrich & Gunther Markwardt, 2004. "Arbeitslosigkeit und Kriminalität : eine mögliche "doppelte Dividende" der Arbeitsmarktpolitik?," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(06), pages 11-17, December.
    7. Nilsson, Anna, 2004. "Income inequality and crime: The case of Sweden," Working Paper Series 2004:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    Keywords

    Crime; unemployment; labor market programs; panel data;

    JEL classification:

    • J00 - Labor and Demographic Economics - - General - - - General
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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