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Crime Rates Versus Labor Market Conditions; Theory and Time-Series Evidence

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  • Tadashi Yamada
  • Tetsuji Yamada
  • Johan M. Kang

Abstract

The aim of this paper is to examine the impact of labor market conditions, represented by male civilian unemployment rates, on seven major categories of crime. We propose a theoretical model from which the positive macro relationship between the unemployment rate and the crime rate is explicitly derived. The solution of the proposed model shows the concurrent counter-cyclical movements of the unemployment and crime rates, which is found to be consistent with the U.S. time series data from the first quarter of 1970 to the fourth quarter of 1983. Thus, we propose a view that an increase in the unemployment rate triggers a subsequent increase in the crime rate. Further, we find that the unemployment rate is statistically exogenous in the VAR model, which indicates a fact that there lie the economic forces and motivations behind the positive relationship between the unemployment rate and the crime rate.

Suggested Citation

  • Tadashi Yamada & Tetsuji Yamada & Johan M. Kang, 1991. "Crime Rates Versus Labor Market Conditions; Theory and Time-Series Evidence," NBER Working Papers 3801, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3801
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    Cited by:

    1. Gerard van den Berg & Michele Tertilt, 2012. "Domestic Violence over the Business Cycle," 2012 Meeting Papers 1171, Society for Economic Dynamics.
    2. Entorf, Horst & Spengler, Hannes, 2000. "Development and validation of scientific indicators of the relationship between criminality, social cohesion and economic performance," ZEW Dokumentationen 00-05, ZEW - Leibniz Centre for European Economic Research.
    3. Víctor Hugo Torres Preciado, 2017. "Desempleo y criminalidad en los estados de la frontera norte de México: un enfoque espacial bayesiano de vectores auto-regresivos. (Unemployment and crime in the Northern-border states of Mexico: a sp," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 25-58, May.
    4. Paul J. Zak, 2000. "Larceny," Economics of Governance, Springer, vol. 1(2), pages 157-179, July.
    5. B. Wolfe & S. Zuvekas, "undated". "Nonmarket outcomes of schooling," Institute for Research on Poverty Discussion Papers 1065-95, University of Wisconsin Institute for Research on Poverty.
    6. Robert H. Haveman & Barbara L. Wolfe, 2002. "Social and nonmarket benefits from education in an advanced economy," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 47(Jun), pages 97-142.

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