Crime Rates and Local Labor Market Opportunities in the United States: 1979–1997

Abstract

The labor market prospects of young, unskilled men fell dramatically in the 1980s and improved in the 1990s. Crime rates show a reverse pattern: increasing during the 1980s and falling in the 1990s. Because young, unskilled men commit most crime, this paper seeks to establish a causal relationship between the two trends. Previous work on the relationship between labor markets and crime focused mainly on the relationship between the unemployment rate and crime, and found inconclusive results. In contrast, this paper examines the impact of both wages and unemployment on crime, and uses instrumental variables to establish causality. We conclude that both wages and unemployment are significantly related to crime, but that wages played a larger role in the crime trends over the last few decades. These results are robust to the inclusion of deterrence variables, controls for simultaneity, and controlling for individual and family characteristics.

Immigration and Prosecutorial Discretion

“…Why might this be? Insofar as rising unemployment often results in increased criminal behavior (Freeman 1996;Gould et al 2002;Machin and Meghir 2004), federal prosecutors may find themselves confronted with other types of serious crimes that merit attention -from bank robbery to embezzlement to weapons violations -encouraging prosecutors to decline less serious criminal immigration referrals in favor of federal administrative deportation proceedings. The only official recession during the period of our study occurred in fiscal years 2001-2002, during which time federal prosecutors did expand their focus on drugs and weapons prosecutions.…”

Education and criminal behavior: Insights from an expansion of upper secondary school

“…25 We augmented the dataset with information on each parent's education (measured in 1990), age, and whether both parents have foreign background (defined as born outside Sweden). For the fathers, we also added information on employment status and wage earnings (measured in 1990), as well as criminal convictions (measured in the year the child enrolled in upper secondary school).…”

“…A possible objection is that criminal behavior is only observed for individuals who have been convicted in court. One 25 Around 8 percent of the original sample has been excluded due to missing information on some of the variables.…”

“…Taken together, these sources of variation enable us to shed light on the mechanisms through which education can affect crime. Grogger 1998;Gould, Mustard and Weinberg 2002;Machin and Meghir 2004;Grönqvist 2013). This effect is potentially counteracted if education raises the opportunities to commit crime and the returns to certain types of crime.…”

“…Educational reform can also affect the peer composition for a given individual, meaning exposure to contexts with varying degrees of crime 4 Several studies have shown that better labor market opportunities reduce crime (e.g. Grogger 1998;Gould, Mustard and Weinberg 2002;Machin and Meghir 2004;Grönqvist 2013). This effect is potentially counteracted if education raises the opportunities to commit crime and the returns to certain types of crime.…”