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.     

Aspects of Australian and US Living Standards: The Disappointing Decades 1970–1990*

One theme documents the parallel US and Australian histories of real wages, employment and unemployment since 1950 and notes the break in relativities in the mid 1970s which began with a 30 per cent Australian real wage increase relative to the US. Since then Australian real wages have remained constant, unemployment increased fourfold and the male full-time employment-population ratio fallen 25 per cent The other theme relates to the widening dispersion of male real wages, the large job loss from the middle of the earnings distribution and rapid employment growth at low earnings     

HOW TO VALUE THE POORER PROSPECTS OF YOUTH IN THE EARLY 1990s?

Young workers in the 1990s can expect greater economic insecurity, as well as lower average earnings, compared to older workers, or compared to the youth of previous decades. The cost of greater insecurity depends upon an individual's probability of unemployment, marginal utility of income gains/losses and the extent to which individuals can smooth consumption over time by borrowing and drawing down assets. Since unemployment insurance cutbacks and higher unemployment have increased the risk exposure of youth, changes in the expected value of their income may understate utility losses as measured by the change in certainty equivalent income.
This paper uses a behavioural microsimulation model to compare the impacts of 1971 and 1994 unemployment insurance legislation and unemployment rates in Canada. It calculates both the expected value of income changes and, using a Stone-Geary utility function, the change in inequality of well-being (as measured by certainty equivalent income) for youth and for prime age workers. Both calculations reveal that youth were disproportionately affected by Canada's changing labour market environment. Very few youth have enough assets to finance consumption during spells of unemployment.     

Macroeconomic Determinants of Crime: Evidence from India

This paper examines the relationship between crime, inflation, unemployment, and real GDP per capita in India. Based on the national-level data, the Johansen cointegration test confirms the presence of cointegration relationship between the variables. The Toda–Yamamoto Granger causality test suggests that macroeconomic indicators, especially unemployment, can significantly affect crime in India. Based on the state-level data, the ordinary least squares results corroborate the effect of inflation on crime even after controlling for governance. However, they fail to verify the relationship between crime, unemployment, and real GDP per capita.

     

CRIME AND POVERTY: A SEARCH‐THEORETIC APPROACH*

Numerous studies document that criminal activity is positively related to unemployment and negatively related to educational attainment levels within given communities. We study this phenomenon in the context of a search‐equilibrium model, in which agents choose between formal employment and pursuing crime‐related activities (theft). Prior to their “occupational choices,” agents undertake costly schooling, raising their productivity. Crime acts, in essence, as a tax on human capital by affecting the probability that a worker's earnings (possessions) are subsequently appropriated. There are multiple equilibria. High crime, low levels of educational attainment, long spells of unemployment, and poverty are correlated across them.     

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.     

Labour quality and aggregate real-wage dynamics

The real wage plays an important role in many aggregate econometrics studies of the labour market. However, average wages, like any other average quantity, can change for two reasons – either through an underlying movement in the earnings potential of a unit of labour of given quality or, alternatively, through compositional changes which alter the relative proportions of different types of labour within the employed labour force. Using data from the General Household Survey to estimate earnings functions, the paper seeks to examine the contribution of these two factors for Britain from 1979 to 1989. It is shown that in periods of rising unemployment compositional changes can have a bigger effect on real-earnings growth than any underlying change in reward to labour of give quality. This raises the question of what economists actually are measuring when considering the behaviour of the aggregate real wage.     

Euro,crisis and unemployment: Youth patterns,youth policies?

This paper examines the occurrence of structural breaks in European unemployment associated with major institutional events. We uncover different responses of adult and youth unemployment rates. While adult unemployment is more prone to experience structural breaks, youth unemployment is more sensitive to business cycle oscillations, especially in the recent crisis. This calls for fine tuning policy measures specifically targeted to youth unemployed in bad times. One important implication of our findings is that generic labour market reforms are not effective enough to solve the youth unemployment problem. Educational policies raising average qualifications and helping school-to-work transitions are suitable complementary cures.     

Evolution of infant and child mortality in Chile: a model

The author contends that birth rate and infant and child mortality rates are jointly determined by demographic, economic, health care, and other influences. Working under this structural assumption, a multiequation model is developed, estimated, and simulated, in which real earnings, unemployment, midwife visits, access to cheap energy, public health expenditures, and degree of urbanization are determinant factors of declining infant and child mortality in Chile. Most notably, mortality declined during a period of increasing unemployment and falling living standards for at least part of the population. The study found all 3 rates to be jointly determined, but by different variables. Specifically, unemployment affected birth rate and child mortality rate, while declining infant mortality was based upon midwife visits, health expenditure, and access to cheap energy. At the policy level, trade-offs often result between infant and child mortality, especially where high birth rates prevail. Where movement along the Phillips curve is possible, higher earnings should be preferred over lower unemployment for the benefit of infant and child mortality. Preferred policy would week to provide a carefully balanced combination of better earnings and more midwife visits.     

Return Versus onward Migration: Go Back or Move On?

This paper examines the impact of unemployment on out-migration by distinguishing between return and onward migration and controlling for total earnings. We use Timing-of-Events models and control for the endogeneity of total earnings, unemployment and out-migration using administrative data from the Netherlands. Our findings suggest that unemployment triggers return migration more than onward migration. When total earnings are low unemployment increases the hazard of return migration. When total earnings are high the hazard rate of onward migration for unemployed immigrants increases. Thus, these findings highlight that out-migration is affected both by unemployment and by total earnings as well as by the interaction between the two.     

A Downward‐Sloping Labor Supply Curve: The Case of Peru

The author finds evidence of a downward‐sloping labor supply curve for urban areas in Peru from cross‐sectional household data for 2002 and pooled data for available years from 1985 to 2000. Individuals respond to lower hourly earnings with an increase in the quantity supplied of work hours. This behavior would help to explain the increasing trend in average work hours in Peru (this average for male workers in Lima, the capital city, rose from 50.5 to 53.9 weekly hours between 1985 and 2000; meanwhile, 33.4% of workers had weekly schedules above 60 hours in 2002). Another finding is the increase in hours supplied due to pressure from the more numerous cohorts recently entering the Peruvian labor market.     

Institutional determinants of the unemployment-earnings inequality trade-off

Most of the research efforts in recent years to explain international differences in unemployment and earnings inequality have placed the emphasis on the institutional components of the labour markets. The purpose of this paper is to evaluate which are the real effects of these characteristics on both phenomena using an ample set of data for different OECD countries. A Cluster analysis permits consideration about relatively heterogeneous models. The results of the econometric exercise show also that institutional factors have a greater impact on earnings inequality than on unemployment.     

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.     

Minimum wages and youth unemployment

This paper constructs a labor search model to explore the effects of minimum wages on youth unemployment. To capture the gradual decline in unemployment for young workers as they age, the standard search model is extended so that workers gain experience when employed. Experienced workers have higher average productivity and lower job finding and separation rates that match wage and worker flow data. In this environment, minimum wages can have large effects on unemployment because they interact with a worker's ability to gain job experience. The increase in minimum wages between 2007 and 2009 can account for a 0.8 percentage point increase in the steady state unemployment rate and a 2.8 percentage point increase in unemployment for 15–24 year old workers in the model parameterized to simulate outcomes of high school educated workers. Minimum wages can also help explain the high rates of youth unemployment in France compared to the United States.     

Modeling crime in Japan

This study aims at identifying the factors of aggregate and disaggregate crime categories in Japan over the period 1964–2009. All crime categories are related to police outlays, police numbers, unemployment, divorce and urbanization rates. Bounds testing approach to cointegration is implemented to test the existence of a long-run relationship amongst the variables. Cointegration analysis yields that the main deterrent effect on crime is the police presence and this factor is further confirmed by the real police outlays. As for the essential cause of crime, urbanization stands as the leading factor which is followed by divorce and unemployment rates. Policy implications are discussed.     

Criminal behaviour and youth in the labour market: the case of the pernicious minimum wage

This paper empirically tests the relationship between variations in Uniform Crime Reports (UCR) index crime rates for teenagers 16–19 years of age with changes in the real minimum wage adjusted for industry coverage in the United States for the period 1960–1987. The analysis reveals that there exists a positive relationship between changes in the real minimum wage and teenage criminal homicide, forcible rape, and motor vehicle theft crime rates. These findings are consistent with the empirical evidence concerning the impacts of the minimum wage on youth labour market opportunities and also with the theoretical ad empirical evidence regarding the incidence of criminal activity made as an occupational choice decision formulated under risk and uncertainty. However, the results indicate no impact of the minimum wage on the other teenage UCR index crime rates as found by Hashimoto (1987). The evidence also suggests that variations in real criminal justice expenditures per capita reduce teenage propety crime rates over time. Thus, there exists weak empirical evidence suggesting that policymakers should not only concern themselves with the traditionally known impacts of the minimum wage on youth labour market activities but also with the added social costs these impacts have on the incidence of youth criminal behavior. Matters of data exigencies and issues pertaining to the direction of future research are also discussed.     

Earnings inequality and unemployment in South Africa

Unemployment and earnings inequality have moved together remarkably closely in South Africa in recent years. This article explores the relationship between unemployment and earnings inequality in South Africa, investigating the extent to which changes in unemployment can account for changes in earnings inequality. Static and dynamic decompositions of earnings inequality by employment status reveal the centrality of unemployment in accounting for the both level and trend of earnings inequality. The distribution of employment in the formal and informal sectors is found to be of lesser importance in explaining earnings inequality, as is wage dispersion within each of these categories. The findings point to the central importance of reducing unemployment in South Africa if the extremely high levels of inequality are to be reduced.     

Labour Market Flexibility and Immigrant Adjustment

A comparative analysis of adult male immigrant earnings and unemployment in the US and Australia using a measure of expected earnings shows that immigrants in the US perform relatively well, and the pattern of the differences between immigrant adjustment in the US and Australia appears to have links to differences in methods of pay determination. The results suggest an advantage to a more flexible labour market. A simulation exercise demonstrates the sensitivity of the findings to cohort effects.     

Can Google data help predict French youth unemployment?

According to the growing “Google econometrics” literature, Google queries may help predict economic activity. The aim of our paper is to test whether these data can enhance predictions of youth unemployment in France.Because we have weekly series on web search queries and monthly series on unemployment for 15- to 24-year olds, we use the unobserved components approach in order to exploit all available information. Our model is estimated with a modified version of the Kalman filter, taking into account the twofold issue of non-stationarity and multiple frequencies in our data.We find that including Google data improves unemployment predictions relative to a competing model that does not employ search data queries.