The Effects of Unemployment on Property Crime: Evidence from a Period of Unusually Large Swings in the Business Cycle
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.
|Date of creation:||25 Mar 2003|
|Date of revision:|
|Publication status:||Published as Edmark, Karin, 'Unemployment and Crime: Is there a connection?' in Scandinavian Journal of Economics, 2005, pages 353-373.|
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