IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc20/224611.html
   My bibliography  Save this paper

A Vicious Cycle of Regional Unemployment and Crime? - Evidence from German Counties

Author

Listed:
  • Umbach, Tim

Abstract

Much research has been done showing that unemployment can cause crime, and that crime adversely impacts economic activity. However, very few authors have considered a simultaneous relationship. Using an IV-setup and regional panel-data, I find evidence for the possibility of a vicious cycle, with unemployment leading to higher crime rates and crime rates raising unemployment. I further find that especially employment in low-skill service jobs is adversely affected by crime, that many types of crime are impacted by unemployment differently and that both apartment rents and GDP-growth decrease if crime increases. The spatial dependencies found further raise the possibility that these vicious cycles could spill over into neighboring regions.

Suggested Citation

  • Umbach, Tim, 2020. "A Vicious Cycle of Regional Unemployment and Crime? - Evidence from German Counties," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224611, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc20:224611
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/224611/1/vfs-2020-pid-40194.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    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. 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.
    3. Maria Cracolici & Teodora Uberti, 2009. "Geographical distribution of crime in Italian provinces: a spatial econometric analysis," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 29(1), pages 1-28, February.
    4. Hector M. Nuñez & Dusan Paredes & Rafael Garduño-Rivera, 2017. "Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 171-187, July.
    5. Stephen Machin & Olivier Marie & Sunčica Vujić, 2011. "The Crime Reducing Effect of Education," Economic Journal, Royal Economic Society, vol. 121(552), pages 463-484, May.
    6. Jan Mutl & Michael Pfaffermayr, 2011. "The Hausman test in a Cliff and Ord panel model," Econometrics Journal, Royal Economic Society, vol. 14, pages 48-76, February.
    7. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
    8. Anderson, David A, 1999. "The Aggregate Burden of Crime," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 611-642, October.
    9. Entorf Horst, 2009. "Crime and the Labour Market: Evidence from a Survey of Inmates," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 254-269, April.
    10. 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.
    11. Berger, Mark C. & Blomquist, Glenn C. & Sabirianova Peter, Klara, 2008. "Compensating differentials in emerging labor and housing markets: Estimates of quality of life in Russian cities," Journal of Urban Economics, Elsevier, vol. 63(1), pages 25-55, January.
    12. 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.
    13. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    14. Claudio Detotto & Manuela Pulina, 2013. "Does more crime mean fewer jobs and less economic growth?," European Journal of Law and Economics, Springer, vol. 36(1), pages 183-207, August.
    15. 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.
    16. Claudio Detotto & Marco Vannini, 2010. "Counting the cost of crime in Italy," Global Crime, Taylor & Francis Journals, vol. 11(4), pages 421-435, November.
    17. Norman Loayza & Pablo Fajnzylber & Daniel Lederman, 2000. "Crime and Victimization: An Economic Perspective," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2000), pages 219-302, August.
    18. Patrick Bennett & Amine Ouazad, 2020. "Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms [The Link between Human Capital, Mass Layoffs, and Firm Deaths]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2182-2220.
    19. Anna Bindler & Nadine Ketel, 2022. "Scaring or Scarring? Labor Market Effects of Criminal Victimization," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 939-970.
    20. 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.
    21. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    22. Edward L. Glaeser & Bruce Sacerdote, 1999. "Why Is There More Crime in Cities?," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 225-258, December.
    23. Jim Taylor & Steve Bradley, 1997. "Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and the UK," Kyklos, Wiley Blackwell, vol. 50(2), pages 221-245, May.
    24. Keefer,Philip & Loayza,Norman (ed.), 2008. "Terrorism, Economic Development, and Political Openness," Cambridge Books, Cambridge University Press, number 9780521887588, October.
    25. Ha, Olivia K. & Andresen, Martin A., 2017. "Unemployment and the specialization of criminal activity: A neighborhood analysis," Journal of Criminal Justice, Elsevier, vol. 48(C), pages 1-8.
    26. Marlon G. Boarnet, 1994. "An Empirical Model Of Intrametropolitan Population And Employment Growth," Papers in Regional Science, Wiley Blackwell, vol. 73(2), pages 135-152, April.
    27. Bernard Fingleton & Julie Le Gallo, 2008. "Estimating spatial models with endogenous variables, a spatial lag and spatially dependent disturbances: Finite sample properties," Papers in Regional Science, Wiley Blackwell, vol. 87(3), pages 319-339, August.
    28. Julie Le Gallo & Bernard Fingleton, 2008. "Estimating spatial models with endogenous variables, a spatial lag and spatially dependent disturbances : finite sample properties," Post-Print hal-00485035, HAL.
    29. J. Paul Elhorst, 2003. "Specification and Estimation of Spatial Panel Data Models," International Regional Science Review, , vol. 26(3), pages 244-268, July.
    30. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    31. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Povilas Lastauskas & Eirini Tatsi, 2013. "Spatial Nexus in Crime and unemployment in Times of crisis: Evidence from Germany," Cambridge Working Papers in Economics 1359, Faculty of Economics, University of Cambridge.
    2. Lastauskas, Povilas & Tatsi, Eirini, 2017. "Spatial Nexus in Crime and Unemployment in Times of Crisis," Working Paper Series 2/2017, Stockholm University, Swedish Institute for Social Research.
    3. Deiana, C, 2016. "Local Labour Market Effects of Unemployment on Crime Induced by Trade Shocks," Economics Discussion Papers 16529, University of Essex, Department of Economics.
    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. O’Flaherty, Brendan & Sethi, Rajiv, 2015. "Urban Crime," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1519-1621, Elsevier.
    6. Corvalan, Alejandro & Pazzona, Matteo, 2019. "Persistent commodity shocks and transitory crime effects," Journal of Economic Behavior & Organization, Elsevier, vol. 158(C), pages 110-127.
    7. Sieger, Philip, 2013. "Job Losses and Criminal Gains: Analyzing the Effect of Unemployment on Criminal Activity," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79929, Verein für Socialpolitik / German Economic Association.
    8. Paolo Buonanno, 2006. "Crime and Labour Market Opportunities in Italy (1993–2002)," LABOUR, CEIS, vol. 20(4), pages 601-624, December.
    9. Entorf, Horst, 2013. "Criminal Victims, Victimized Criminals, or Both? A Deeper Look at the Victim-Offender Overlap," IZA Discussion Papers 7686, Institute of Labor Economics (IZA).
    10. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Jorge Tamayo & Nicolas Torres, 2023. "Formal Employment and Organised Crime: Regression Discontinuity Evidence from Colombia," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2427-2448.
    11. Kangoh Lee, 2018. "Unemployment and crime: the role of apprehension," European Journal of Law and Economics, Springer, vol. 45(1), pages 59-80, February.
    12. Leiva, Mauricio & Vasquez-Lavín, Felipe & Ponce Oliva, Roberto D., 2020. "Do immigrants increase crime? Spatial analysis in a middle-income country," World Development, Elsevier, vol. 126(C).
    13. Entorf, H. & Winker, P., 2008. "Investigating the drugs-crime channel in economics of crime models: Empirical evidence from panel data of the German States," International Review of Law and Economics, Elsevier, vol. 28(1), pages 8-22, March.
    14. Altindag, Duha T., 2012. "Crime and unemployment: Evidence from Europe," International Review of Law and Economics, Elsevier, vol. 32(1), pages 145-157.
    15. Entorf, Horst & Winkler, Peter, 2001. "The economics of crime: investigating the drugs-crime channel: empirical evidence from panel data of the German states," ZEW Discussion Papers 01-37, ZEW - Leibniz Centre for European Economic Research.
    16. Mohamad Kassem & Amjad Ali & Marc Audi, 2019. "Unemployment Rate, Population Density and Crime Rate in Punjab (Pakistan): An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(2), pages 92-104, June.
    17. Paolo Buonanno & Giacomo Pasini & Paolo Vanin, 2012. "Crime and social sanction," Papers in Regional Science, Wiley Blackwell, vol. 91(1), pages 193-218, March.
    18. Paolo Buonanno, 2003. "The Socioeconomic Determinants of Crime. A Review of the Literature," Working Papers 63, University of Milano-Bicocca, Department of Economics, revised Nov 2003.
    19. Bebonchu Atems, 2020. "Identifying the Dynamic Effects of Income Inequality on Crime," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 751-782, August.
    20. Patrick Bennett & Amine Ouazad, 2020. "Job Displacement, Unemployment, and Crime: Evidence from Danish Microdata and Reforms [The Link between Human Capital, Mass Layoffs, and Firm Deaths]," Journal of the European Economic Association, European Economic Association, vol. 18(5), pages 2182-2220.

    More about this item

    Keywords

    Crime; Unemployment; Amenities; spatial autregresssive model; SARAR; endogenous regessors.;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc20:224611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.