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Unemployment and Crime: New Answers to an Old Question

Author

Listed:
  • Papps, Kerry L.

    () (University of Bath)

  • Winkelmann, Rainer

    () (University of Zurich)

Abstract

This paper uses panel data techniques to examine the relationship between unemployment and a range of categories of crime in New Zealand. The data cover sixteen regions over the period 1984 to 1996. Random and fixed effects models are used to investigate the possibility of a causal relationship between unemployment and crime. Hypothesis tests show that the inclusion of random region effects and fixed time effects produces the most efficient model. The main finding of the paper is that unemployment cannot explain changes in the overall crime rate, although significant effects on crime are found for some subcategories of crime.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp25
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
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    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 112-134.
    4. Tauchen, Helen & Witte, Ann Dryden & Griesinger, Harriet, 1994. "Criminal Deterrence: Revisiting the Issue with a Birth Cohort," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 399-412, August.
    5. 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.
    6. George J. Stigler, 1974. "The Optimum Enforcement of Laws," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 55-67 National Bureau of Economic Research, Inc.
    7. Samuel L. Myers, 1983. "Estimating the Economic Model of Crime: Employment Versus Punishment Effects," The Quarterly Journal of Economics, Oxford University Press, vol. 98(1), pages 157-166.
    8. Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
    9. 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.
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    Citations

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    Cited by:

    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. Jorgen Lauridsen, 2009. "Is Baltic Crime Economically Rational?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(1), pages 31-38, July.
    3. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2006. "Crime Distribution & Victim Behavior During a Crime Wave," William Davidson Institute Working Papers Series wp849, William Davidson Institute at the University of Michigan.
    4. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, September.
    5. Halicioglu, Ferda & Andrés, Antonio R. & Yamamura, Eiji, 2012. "Modeling crime in Japan," Economic Modelling, Elsevier, vol. 29(5), pages 1640-1645.
    6. Michele Caputo & Francesco Forte & Michela Mantovani, 2014. "Long-run and shorter-run criminal cycles in the public economics of public bads," Chapters,in: A Handbook of Alternative Theories of Public Economics, chapter 22, pages 503-542 Edward Elgar Publishing.
    7. Syed Yasir Mahmood Gillani & Rana Ejaz Ali Khan & Abid Rashid Gill, 2011. "Unemployment and Property Crimes in Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 124-133, September.
    8. Ian Pool & Sandra Baxendine & William Cochrane & James Lindop, 2006. "New Zealand Regions, 1986-2001: Dependency and Development of Social Capital," Population Studies Centre Discussion Papers dp-62, University of Waikato, Population Studies Centre.
    9. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ayse, 2014. "Is crime in Turkey economically rational?," Discussion Papers of Business and Economics 3/2014, University of Southern Denmark, Department of Business and Economics.
    10. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2010. "Crime Distribution and Victim Behavior during a Crime Wave," NBER Chapters,in: The Economics of Crime: Lessons for and from Latin America, pages 175-204 National Bureau of Economic Research, Inc.
    11. Paolo Buonanno, 2006. "Crime and Labour Market Opportunities in Italy (1993-2002)," LABOUR, CEIS, vol. 20(4), pages 601-624, December.
    12. Lauridsen, Jorgen, 2010. "Is Polish Crime Economically Rational?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(2).
    13. Vujić Sunčica & Koopman Siem Jan & Commandeur J.F., 2012. "Economic Trends and Cycles in Crime: A Study for England and Wales," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(6), pages 652-677, December.
    14. 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.
    15. Nikolaos Dritsakis & Alexandros Gkanas, 2009. "The effect of socio-economic determinants on crime rates: An empirical research in the case of Greece with cointegration analysis," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 2(2), pages 51-64, December.

    More about this item

    Keywords

    clearance rate; regional panel data; fixed effects;

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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