Dec 11, 2013

Unemployment and Crime (Germany)

I have not seen much literature on the way in which unemployment affects crime. One reason might be that unemployment might affect crime, and crime might affect unemployment as well. In other words these variables affect each other and isolating the effect of one over the other is difficult. 

This study researches exactly that. The paper is very technical but the main finding is that  unemployment explains housing burglary. 

The abstract
More specifically, we find that youth unemployment plays a prominent role in explaining property crime, namely housing burglary. Our results are in line with previous research: neglecting endogeneity of unemployment understates its impact and employing the youth unemployment share instead of rate points to distinctive effects. The analysis offers important implications for countries that are currently undergoing fiscal consolidation and are experiencing high unemployment rates.

The study is by Povilas Lastauskas & Eirini Tatsi. And the name of the paper is "Spatial Nexus in Crime and Unemployment in Times of Crisis: Evidence from Germany." 
Notice the unemployment rate in what used to be East Germany.

To do a similar study in Latin America, Sub-Saharan Africa, or South Asia is very difficult because the data of unemployment is not usually reliable, and there is a lot of people employed in the informal sector. 

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