Unemployment and Crime Rates in the Post-World War II United States: A Theoretical and Empirical Analysis

Abstract

Using annual time-series data for the United States, 1946-1982, two hypotheses are tested: (1) The level of the unemployment rate in any given year will have a negative partial contemporaneous effect on detrendedfluctuations (increases or decreases) in seven Index Crime rates (homicide, rape, aggravated assault, robbery, burglary, larceny-theft, and motor vehicle theft) in that year. (2) Unemployment-rate fluctuationsfrom one year to the next will have a positive partial effect on detrended crime-rate fluctuations in the next year. These hypotheses are developed from a theoretical model that identifies the former with a criminal opportunity effect, and the latter with a criminal motivation effect, of aggregate unemployment on crime. For burglary, robbery and larceny-theft, empirical support is found for the expected pattern of partial effects. However, the relative sizes of the effects are such that the total impacts of unemployment-through both partial effects-are negative. In addition, only the negative-levels effect is exhibited for homicide and motor vehicle theft, while rape and aggravated assault show no consistent association with either levels orfluctuations in the unemployment rate. Interpretations for these findings are discussed.