ASSESSING THE IMPACTS OF LABOR MARKET AND DETERRENCE VARIABLES ON CRIME RATES IN MEXICO

Many studies examine the relationship between crime rates and various economic and/or sociodemographic variables in high income countries, but similar efforts for middle and low income countries are less common. Utilizing an 8‐year panel data sample for all 32 states in Mexico, this study assesses the impact of Mexican labor market and deterrence variables on various Mexican crime rates. The principal results indicate that: (1) State gross domestic product (GDP) per capita has ambiguous effect on crime rates under different conditions. Both wages and unemployment rates are negatively linked with crime rates. (2) Although the Mexican judicial and public security systems are widely believed to be ineffective, increased federal police forces and incarceration rates are associated with lower crime rates, but higher public security expenditure per capita is associated with higher crime rates. (3) The impacts from labor market and deterrence variables presented in (1) and (2) continue to hold under the Fox administration as well as for non‐border states. Their respective impacts diminish, however, under the Calderon administration as well as for border states because of the small number of observations. Overall, the results indicate that increasing average wages, federal police forces, and incarceration rates would have significant impacts on reducing crime rates in Mexican states. (JEL O54, K42)     

Inequality and criminality revisited: further evidence from Brazil

The objective of this study is to shed light on the determinants of criminality rates in Brazil. A panel data model was estimated using Brazilian states’ data. Our main result suggests that income inequality plays an important role in the determination of the crime rate. Furthermore, there are evidence suggesting that both unemployment and urbanization rates are positively related to crime. Based on a GMM approach we find the existence of an “inertial effect” on criminality. Besides that, the GMM results show that public security spending is effective in reducing criminality rates. Contrary to the common wisdom, we could not find evidence that poverty increases violent crimes. Finally, we have evidence that income inequality Granger causes crime, but not the reverse.     

Unemployment,marriage and divorce

In this article, we examine whether the business cycle plays a role in marriage and divorce. We use data on Spain, since the differences between recession and expansion periods across regions are quite pronounced in that country. We find that the unemployment rate is negatively associated with the marriage rate, pointing to a pro-cyclical evolution of marriage; however, the response of the divorce rate to the business cycle is mixed. Results show the existence of different patterns, depending on geography: divorce rates in coastal regions are pro-cyclical, while in inland regions divorces react to unemployment in a counter-cyclical way.     

FOR BETTER OR FOR WORSE,BUT HOW ABOUT A RECESSION?

In light of the current economic crisis, we estimate hazard models of divorce to determine how state and national unemployment rates affect the likelihood of a divorce or separation. With data in the United States over the 1978–2008 period from the 1979 NLSY, we find some evidence indicating that a higher unemployment rate increases the risk of a marriage ending for couples in years 6–10 of marriage (suggesting counter‐cyclical divorce/separation probabilities) but has no significant effect for couples in years 1–5 of marriage and those married longer than 10 years. The estimates are generally stronger in magnitude when using national instead of state unemployment rates and when considering just divorces rather than the first observed divorce or separation. (JEL J12)     

Unemployment and Crime: Is There a Connection?

A panel of Swedish counties over the years 1988–1999 is used to study the effects of unemployment on property crime rates. The period under study is characterized by turbulence in the labor market—the variation in unemployment rates was unprecedented in the latter part of the century. Hence, the data provide a unique opportunity to examine 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 to control for unobservables and covariates. The results show that unemployment had a positive and significant effect on some property crimes (burglary, car theft and bike theft).     

Crime,apprehension and clearance rates: Panel data evidence from Canadian provinces

The Becker model of crime establishes the importance of the probability of apprehension as a key factor in a rational individual's decision to commit a crime. In this respect, most empirical studies based on US data have relied on variation in the number of police officers to estimate the impact of the probability of apprehension or capture. We measure the probability of apprehension by clearance rates and study their effects on crime rates, employing a panel of Canadian provinces from 1986 to 2005. OLS, GMM, GLS and IV estimates yield statistically significant elasticities of clearance rates, ranging from ?0.2 to ?0.4 for violent crimes and from ?0.5 to ?0.6 for property crimes. These findings reflect the importance of police force crime‐solving productivity.     

Crime rates,male youth unemployment and real income in Australia: evidence from Granger causality tests

This article applies Granger causality tests to examine the relationship between seven different categories of property crime and violent crime against the person, male youth unemployment and real male average weekly earnings in Australia from 1964 to 2001 within a cointegration and vector error correction framework. It is found that fraud, homicide and motor vehicle theft are cointegrated with male youth unemployment and real male average weekly earnings. However, there is no evidence of a long-run relationship between either break and enter, robbery, serious assault or stealing with male youth unemployment and real male average weekly earnings.     

Crime and labour market turnover

We go beyond unemployment to investigate how its determinants, specifically hires, lay-offs and quits, affect crime. As expected, we find less crime in localities with higher hiring and quit rates and lower lay-off rates. The size of relationships is on the order of studies analysing the link between unemployment and crime.     

AN ON‐THE‐JOB SEARCH MODEL OF CRIME,INEQUALITY, AND UNEMPLOYMENT*

We extend simple search models of crime, unemployment, and inequality to incorporate on‐the‐job search. This is valuable because, although simple models are useful, on‐the‐job search models are more interesting theoretically and more relevant empirically. We characterize the wage distribution, unemployment rate, and crime rate theoretically, and use quantitative methods to illustrate key results. For example, we find that increasing the unemployment insurance replacement rate from 53 to 65 percent increases unemployment and crime rates from 10 and 2.7 percent to 14 and 5.2 percent. We show multiple equilibria arise for some fairly reasonable parameters; in one case, unemployment can be 6 or 23 percent, and crime 0 or 10 percent, depending on the equilibrium.     

Examining the link between crime and unemployment: a time-series analysis for Canada

We use national and regional Canadian data to analyse the relationship between economic activity (as reflected by the unemployment rate) and crime rates. Given potential aggregation bias, we disaggregate the crime data and look at the relationship between six different types of crimes rates and unemployment rate; we also disaggregate the data by region. We employ an error correction model in our analysis to test for short-run and long-run dynamics. We find no evidence of long-run relationship between crime and unemployment, when we look at both disaggregation by type of crime and disaggregation by region. Lack of evidence of a long-run relationship indicates we have no evidence of the motivation hypothesis. For selected types of property crimes, we find some evidence of a significant negative short-run relationship between crime and unemployment, lending support to the opportunity hypothesis. Inclusion of control variables in the panel analysis does not alter the findings, qualitatively or quantitatively.     

COPS and crime

The Violent Crime Control and Law Enforcement Act of 1994 established the Community Oriented Policing Services (COPS) program that provided grants to states and localities to pay up to 75% of the cost for new police hires for 3 years. To date, the COPS program has awarded almost $5 billion in hiring grants paying for 64,000 new police officers. We use annual data from 1990 through 2001 from 2074 cities with populations in excess of 10,000 to show that for each officer paid for by grant funds, the size of the force expands by 0.70 officers. The size of COPS grants are correlated with population and crime rates, but not the pre-COPS time trends in crime rates or the size of the police force. This allows us to use the size of COPS grants as an instrument for the size of the police force in regressions where crime is the outcome of interest. These models indicate that police added to the force by COPS generated statistically significant reductions in auto thefts, burglaries, robberies, and aggravated assaults.     

收入分配不平等对刑事犯罪的影响

本文利用1988—2006年中国省级面板数据,采用动态面板数据估计了收入分配不平等对刑事犯罪率的影响。研究发现,控制跨省人口迁徙、福利支出、失业率等因素并作相关的稳健性检验以后,以基尼系数度量的收入分配不平等上升1个百分点,刑事犯罪率将至少上升0.185个百分点,并且收入不平等程度不断上升会导致政府增加福利支出以降低刑事犯罪率;城市化会导致刑事犯罪率上升;提高人力资本水平和增加福利支出都会对遏制犯罪发挥重要影响。     

Special issue on forecasting,use of survey data on expectations,and panel data applications: editors’ introduction

This study reinvestigates the relationship between unemployment and crime, but is the first to focus explicitly on the effects of long-term unemployment on crime. A unique finding is that long-term unemployment shows a strong association with violent crime, an effect which is greater than that of total unemployment on property crime in this and most previous studies. Long-term unemployment thus identifies a marginal group for committing crime (particularly violent crime) better than total unemployment, with the duration of unemployment plausibly increasing the strain that fosters violent behaviour.     

Crime during the business cycle: urban–rural differences

Despite the abundant literature on how crime evolves over the business cycle, no consensus has arisen whether crime increases or decreases during recessions. The literature provides both positive and negative associations between the crime rate and the unemployment rate, a commonly used proxy for the business cycle. This study revisits this issue and uses county-level data from 1990 to 2013. It allows for differences as to how unemployment relates to both property crime and violent crime depending on the size of the counties. We find evidence of a positive association between unemployment and property crime that strengthens with county size. The results show the same pattern for violent crime but are statistically weaker. Our findings suggest that the positive association between property crime and unemployment that others have found is largely driven by more populous areas.     

Determinants of violent and property crimes in England and Wales: a panel data analysis

We examine various determinants of property and violent crimes by using police force area level (PFA) data on England and Wales over the period of 1992–2008. Our list of potential determinants includes two law enforcement variables namely crime-specific detection rate and prison population, and various socio-economic variables such as unemployment rate, real earnings, proportion of young people and the Gini Coefficient. By adopting a fixed effect dynamic GMM estimation methodology we attempt to address the potential bias that arises from the presence of time-invariant unobserved characteristics of a PFA and the endogeneity of several regressors. There is a significant positive effect of own-lagged crime rate. The own-lagged effect is stronger for property crime, on an average, than violent crime. We find that, on an average, higher detection rate and prison population leads to lower property and violent crimes. This is robust to various specifications. However, socio-economic variables with the exception of real earnings play a limited role in explaining different crime types.     

Hysteresis versus natural rate in Taiwan's unemployment: Evidence from the educational attainment categories

This study examines the hysteresis hypothesis in unemployment for Taiwan's educational attainment categories. Both nonlinear dynamics and structural breaks in unemployment are applied in our examinations. The empirical results without structural changes show that the unemployment hysteresis hypothesis cannot be rejected in all educational attainment categories. After simultaneously incorporating nonlinear processes and smooth structural changes, we find that only the unemployment rate of junior college graduates reveals a mean reverting to the natural rate in the long-run, whereas all other series still support the hysteresis hypothesis. The results indicate that: i) the shocks have only temporary effects on the unemployment rate of the junior college graduates; ii) the labor or macroeconomic stabilization policies could have long lasting effects on unemployment rates of the other educational attainment categories; iii) the unemployment rates of low-skill labor are susceptible to the changes of economic or fiscal policies; and iv) practical and occupational training mechanisms should be implemented and strengthened in the higher education system to alleviate the increasingly serious problem of unemployment.     

On Regional Unemployment: An Empirical Examination of the Determinants of Geographical Differentials in the UK

In this paper we consider the determinants of regional disparities in unemployment rates for the UK regions at NUTS‐II level. We use a mixture panel data model to describe unemployment differentials between heterogeneous groups of regions. The results indicate the existence of two clusters of regions in the UK economy, characterized by high and low unemployment rates, respectively. A major source of heterogeneity appears to be caused by the varying effect (between the two clusters) of the share of employment in the service sector, and we trace its origin to the fact that the high unemployment cluster is characterized by a higher degree of urbanization.     

The Moral Imperative and Social Rationality of Government-Guaranteed Employment and Reskilling

Unemployment exacts a high cost to its victims, not only in lost income, but also in terms of quality of life (insecurity, depression, abandoned families, divorce, suicide and poorer health). It also exacts a high cost to society in terms of lost output, foregone tax revenue, depreciating human capital, and increased costs of welfare, crime and health care. Yet modern wealthy societies have, principally for the sake of price stability and to avoid the budget costs of a full remedy, chosen to tolerate a substantial level of permanent unemployment. This article explores the moral conditions of this social choice and its rationality in terms of social welfare. It makes and develops support for two claims: society's tolerance of involuntary unemployment is morally wrong, and it is socially and economically irrational. It concludes that government should guarantee employment by serving as employer of last resort and where appropriate provide for retraining.     

Strong and weak ties in employment and crime

This paper analyzes the interplay between social structure and information exchange in two competing activities, crime and labor. We consider a dynamic model in which individuals belong to mutually exclusive two-person groups, referred to as dyads. There are multiple equilibria. If jobs are badly paid and/or crime is profitable, unemployment benefits have to be low enough to prevent workers for staying too long in the unemployment status because they are vulnerable to crime activities. If, instead, jobs are well paid and/or crime is not profitable, unemployment benefits have to be high enough to induce workers to stay unemployed rather to commit crime because they are less vulnerable to crime activities. Also, in segregated neighborhoods characterized by high interactions between peers, a policy only based on punishment and arrest will not be efficient in reducing crime. It has to be accompanied by other types of policies that take into account social interactions.     

WHAT ACCOUNTS FOR THE DECLINE IN CRIME?*

In this article we analyze recent trends in aggregate property crime rates in the United States. We propose a dynamic equilibrium model that guides our quantitative investigation of the major determinants of observed patterns of crime. Our main findings can be summarized as follows: First, the model is capable of reproducing the drop in crime between 1980 and 1996. Second, the most important factors that account for the observed decline in property crime are the higher apprehension probability, the stronger economy, and the aging of the population. Third, the effect of unemployment on crime is negligible. Fourth, the increased inequality prevented an even larger decline in crime. Overall, our analysis can account for the behavior of the time series of property crime rates over the past quarter century.