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The Effects of Unemployment on Property Crime: Evidence from a Period of Unusually Large Swings in the Business Cycle

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  • Edmark, Karin

    () (Department of Economics)

Abstract

This paper uses a panel of Swedish counties over the years 1988-99 to study the effects of unemployment on property crime rates. The period under study is characterized by great turbulence in the labor market - the variation in the unemployment rates is unprecedented in the second half of the century. The data hence provides a unique opportunity to investigate unemployment effects. According to the theory of economics of crime, increased unemployment rates lead to higher property crime rates. A fixed effects model is estimated to investigate this hypothesis. The model includes time- and county-specific effects and a number of economic and socio-demographic variables in order to control for unobservables and covariates. In addition the model is estimated with linear and quadratic time trends to control for county-specific unobserved trends. The result gives strong evidence that unemployment has a positive and significant effect on burglary, car theft and bike theft.

Suggested Citation

  • Edmark, Karin, 2003. "The Effects of Unemployment on Property Crime: Evidence from a Period of Unusually Large Swings in the Business Cycle," Working Paper Series 2003:14, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:2003_014
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    File URL: http://www.nek.uu.se/pdf/wp2003_14.pdf
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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. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 319-351.
    3. Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
    4. Ann Dryden Witte & Helen Tauchen, 1994. "Work and Crime: An Exploration Using Panel Data," NBER Working Papers 4794, National Bureau of Economic Research, Inc.
    5. Witte, Ann D & Tauchen, Helen, 1994. "Work and Crime: An Exploration Using Panel Data," Public Finance = Finances publiques, , vol. 49(Supplemen), pages 155-167.
    6. Papps, Kerry L. & Winkelmann, Rainer, 1998. "Unemployment and Crime: New Answers to an Old Question," IZA Discussion Papers 25, Institute for the Study of Labor (IZA).
    7. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    8. 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.
    9. Joanne M. Doyle & Ehsan Ahmed & Robert N. Horn, 1999. "The Effects of Labor Markets and Income Inequality on Crime: Evidence from Panel Data," Southern Economic Journal, Southern Economic Association, vol. 65(4), pages 717-738, April.
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    Citations

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    Cited by:

    1. 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.
    2. Thomas Aronsson & Sören Blomquist, 2008. "Redistribution and Provision of Public Goods in an Economic Federation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(1), pages 125-143, February.
    3. Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics.
    4. Sören Blomquist & Vidar Christiansen, 2008. "Taxation and Heterogeneous Preferences," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(2), pages 218-244, June.
    5. 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

    Economics of Crime; Unemployment; Panel Data; Fixed Effects Estimation;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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