Unemployment and Crime
Is crime cointegrated with income and unemployment?: A panel data analysis on selected European countries by A.H. Baharom1 and Muzafar Shah Habibullah
ABSTRACT This paper examines the causality between income, unemployment and crime in 11 European countries employing the panel data analysis for the period 1993-2001 for both aggregated (total crime) and disaggregated (subcategories) crime data. Fixed and random effect models are estimated to analyze the impact of income and unemployment on total crime and various disaggregated categories of criminal activities. Hypothesis tests show that random effect model should be used for all (namely total crime, motor vehicle crime, domestic burglary, and violent crime) except for drug trafficking. Our results indicate that both income and unemployment have meaningful relationship with both aggregated and disaggregated crime. Crime exhibits positive significant relationship with income for all the categories except for domestic burglary, whereby it is significantly negative relationship. Crime also shows positive significant relationship with unemployment except for violent crime, whereby it is significantly negative relationship. The results also show strong country specific effect in determining the crime level. I. INTRODUCTION Criminal and violent behaviors have become a major concern in recent years across the world. More and more researches are being conducted in various parts of the world; however it is being hampered by unavailability and inconsistency of crime data. Its relationship with macroeconomic variables is very much of interest of policy makers. It cannot be argued that crime is an utmost important subject of study; the fact that it is a global phenomenon whereby most nations and its citizen’s are griped with fear due to the rising statistics of criminal activities. Crime results not only in the loss of property, lives and misery, they also cause severe mental anguish. Imrohoroglu et al. (2006) mentioned that
ABSTRACT This paper examines the causality between income, unemployment and crime in 11 European countries employing the panel data analysis for the period 1993-2001 for both aggregated (total crime) and disaggregated (subcategories) crime data. Fixed and random effect models are estimated to analyze the impact of income and unemployment on total crime and various disaggregated categories of criminal activities. Hypothesis tests show that random effect model should be used for all (namely total crime, motor vehicle crime, domestic burglary, and violent crime) except for drug trafficking. Our results indicate that both income and unemployment have meaningful relationship with both aggregated and disaggregated crime. Crime exhibits positive significant relationship with income for all the categories except for domestic burglary, whereby it is significantly negative relationship. Crime also shows positive significant relationship with unemployment except for violent crime, whereby it is significantly negative relationship. The results also show strong country specific effect in determining the crime level. I. INTRODUCTION Criminal and violent behaviors have become a major concern in recent years across the world. More and more researches are being conducted in various parts of the world; however it is being hampered by unavailability and inconsistency of crime data. Its relationship with macroeconomic variables is very much of interest of policy makers. It cannot be argued that crime is an utmost important subject of study; the fact that it is a global phenomenon whereby most nations and its citizen’s are griped with fear due to the rising statistics of criminal activities. Crime results not only in the loss of property, lives and misery, they also cause severe mental anguish. Imrohoroglu et al. (2006) mentioned that
References: Unemployment -0.2540*** (0.1524) 0.1861*** (0.0645) 0.1508 Motor Vehicle Crime 0.6686*** (0.1805) 0.2525*** (0.0872) 1.0627*** (0.2061) 0.7635 Drug Trafficking 7.0404*** (0.5804)