May 6, 2014

Immigration and Crime: Evidence from Canada

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There is fear of immigrants becoming criminals. But the evidence is controversial. Immigration might actually reduce crime because immigrants are in general law-abiding. In fact "immigrants are underrepresented in in the prison population in Canada" (p. 25). 

This paper by Haimin Zhang (see also here) at the University of British Columbia finds that actually immigration reduces crime, and considers short term and long term effects -- for instance the effect of immigration four years in the past on crime rates today. She argues: "as immigrants stay in Canada longer, their crime reduction effect gets larger" (p. 17). Haimin finds that "compared with the native population, immigrants are better educated, older, more likely to be married, and more likely to reside in metropolitan areas." One of the good things about this study is that, in addition to everything else, it examines cultural factors that might explain reductions in crime rates. For example immigrants might tend to underreport crimes. There is some of that but the magnitude is not large. 

There are many statistical - econometrics - challenges in this type of work. For example more immigrants might reduce crime, but also regions affected by less crime might attract more immigrants. "On the other hand, areas with high crime rates might have lower housing prices and therefore attract immigrants with few financial resources" (p. 26). In other words there is a reverse causality. There might also be endogeneity, meaning that there are other factors that reduce crime and increase immigration at the same time, for example good municipal policies. The Ordinary Least Squares (OLS) method does not deal well with those problems and other methods are necessary, such as instrumental variables, which is what the author does in the paper. Zhang explains: To address these issues I use an instrumental variable strategy introduced by Card [2001]: "it is based on the observation that new immigrants tend to settle in areas where their families and friends are."

Some findings:
This study finds that new immigrants do not have a significant impact on property crime rates, but as they stay longer, more established immigrants actually decrease property crime rates significantly. 
. . . with time spent in Canada, a 10% increase in the recent-immigrant share or established-immigrant share decreases the property crime rate by 2% to 3%. 
Finally in the conclusions she explains:
This paper rules out the possibility that immigrants simply do not report to police when crime happens. Similarly, it finds that dilution of the criminal pool by the addition of law-abiding immigrants can not fully explain the size of the estimates. Therefore, the paper concludes that immigration has a spillover effect, such as changing the neighbourhood characteristics and affecting the behaviour of the native population, reducing crime rates in the long run.
Zhang suggests some questions for future research (p. 26-27):
Does immigration reduce crime by affecting labour market outcomes?  
Do immigrants settle in lower income communities and revitalize them? 
Is it possible that the spill over effect operates through family ties and affects second-generation immigrants?
I wonder if crime increases in sending countries as a result of outmigration, or if crime also decreases when migrants move across developing countries. 
I enjoyed reading Zhang's paper.

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